Bitcoin prices started in the worst way of the weekend and new month after falling below $115,000 on Friday, August 1st. This price drop appears to be worsening.
This recent move has sparked a market-wide conversation about the possibility that Bitcoin may already reach the top of its prices in its current cycle. However, the consensus is that BTC prices still have the chance to jump on at least another leg before they finally reach their cycle peak.
BTC can revisit the forefront highs in the near future: Analysts
In a quick take post on the Cryptoquant platform, on-chain analyst Amr Taha has built a bullish case of Bitcoin prices following a recent shift in the Bitcoin market and broader macrodynamics. In the context of the BTC market, Crypto Pundit highlighted the change in the spot volume of coins in Binance, the world’s largest cryptocurrency exchange due to trading volumes.
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Cryptoquant data shows that Binance has registered more than $7.6 billion in BTC spot volumes daily, marking one of the most significant increases in recent weeks. However, this notable surge in trading activity coincides with a decline in Bitcoin prices and around $113,000 to more than $118,000, indicating an increase in volatility and trader repositioning.
Taha said from a historical perspective, spot volume spikes of this magnitude, such as the $7 billion surge seen on June 22, are often correlated with local bottoms and major price reversals. Thus, the latest jump in Bitcoin spot volume represents demand from new investors and could ultimately be bullish for market leaders.
In the macroeconomic context, Taha also highlighted that the net liquidity of the US Federal Reserve also witnessed a significant increase on Friday, up from $6 trillion to $6.17 trillion. For more context, net liquidity is usually considered a critical macro driver for risky assets such as Bitcoin.
So, a net liquidity spike means more Fiat money is circulating in the financial system, which could flow into stocks, cryptocurrencies and other risk-on assets. Therefore, as seen in late 2023 and early 2024, the increase in the Fed’s net liquidity has historically been consistent with bullish changes across the market.
Ultimately, Taha concluded that the combination of the rise in Bitcoin spot volumes in Binance and the Fed’s net liquidity could set a stage for bullish continuation of flagship cryptocurrency.
Bitcoin price at a glance
At the time of writing, BTC priced around $112,600, reflecting a decline of over 1% over the past 24 hours.
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ISTOCK featured images, TradingView chart
