BTC’s Thin-Liquidity Bounce Raises Questions on Staying Power

Good Morning, Asia. Here’s what’s making information within the markets:

Welcome to Asia Morning Briefing, a each day abstract of high tales throughout U.S. hours and an summary of market strikes and evaluation. For an in depth overview of U.S. markets, see CoinDesk’s Crypto Daybook Americas.

Bitcoin staged a pointy restoration over the previous week, rebounding from a dip under $114,000 to commerce close to $121,000, in what Glassnode described in a current report as a shift from “seller exhaustion to a strong rebound near recent ATHs.”

The rally, nevertheless, got here with no surge in spot market participation.

Glassnode knowledge exhibits spot buying and selling volumes fell 22% to $5.7 billion, near their statistical low band, suggesting the rebound has been pushed extra by positioning shifts than deep conviction shopping for. The Spot Cumulative Volume Delta flipped 94% towards purchase stress, an indication that aggressive promoting has been changed by renewed demand, however not but throughout a broad base of merchants.

On the derivatives facet, leveraged merchants re-engaged aggressively, Glassnode detailed in its report.

Perpetual Cumulative Volume Delta, a measure of the buy-sell stress in perps, jumped 88%, funding charges remained elevated, and choices open curiosity climbed 6.7% to $42.4 billion. Yet, volatility pricing collapsed by virtually a 3rd, indicating a level of complacency that has traditionally preceded massive market strikes.

ETF flows provided some reduction, with U.S.-listed spot bitcoin ETF outflows halving to $311 million from $686 million the prior week. Even so, ETF commerce quantity fell 27.7% to $13.7 billion, preserving exercise close to its low band.

QCP Capital framed the weekend surge, which briefly pushed BTC above $122,000, as a operate of skinny order books and a broader risk-on shift in world markets.

“Crypto staged an impressive comeback over the weekend during thin, low-liquidity trading hours,” the Singapore-based buying and selling agency wrote, noting that the bounce aligned with a rebound in U.S. equities and rising expectations for a September Fed charge minimize.

While on-chain exercise improved, energetic addresses jumped 8.4% to 793,000, and charge quantity rose 10%. Glassnode cautioned that elevated profitability ranges may shortly flip into promoting stress if sentiment shifts. With 94.1% of provide in revenue and the realized profit-to-loss ratio climbing to 1.9, the market could also be nearing a degree the place profit-taking accelerates.

The mixture of skinny liquidity, bullish derivatives positioning, and macro-driven optimism leaves Bitcoin primed for risky strikes because it approaches all-time highs, with the following take a look at doubtless coming from Tuesday’s U.S. CPI launch.

Polymarket merchants lean towards a modest uptick in step with consensus that might doubtless maintain BTC consolidating, with hotter prints posing a short-term headwind by delaying Fed cuts and softer readings providing a possible breakout catalyst if ETF flows and spot exercise strengthen.

Market Movers

BTC: Bitcoin is buying and selling at $118k as merchants pull again and place themselves for the likelihood that Tuesday’s CPI report may break BTC’s momentum.

ETH: Ethereum is buying and selling at $4200. Analysts say that ETH’s rally is partially resulting from elevated capability on-chain and decrease DeFi prices.

Gold: Gold slid to $3,355.13 as upbeat threat sentiment and Trump’s pledge to exclude gold from tariffs weighed on safe-haven demand, although losses have been cushioned by rising Fed charge minimize bets forward of this week’s U.S. inflation knowledge.

Nikkei 225: Asia-Pacific markets rose Tuesday, with Japan’s Nikkei 225 hitting a file excessive after the U.S.-China commerce truce was prolonged, whereas buyers awaited the Reserve Bank of Australia’s anticipated charge minimize.

S&P 500: U.S. shares eased, with the S&P 500 down 0.2% and just below its file, as buyers await new inflation knowledge .Meanwhile, Citigroup and UBS lifted their year-end S&P 500 targets, citing easing coverage dangers and strong earnings, with Citi elevating its forecast to six,600 and UBS to six,100.

Elsewhere in Crypto

• Jeff Bezos’ Blue Origin Now Accepts Bitcoin, Ethereum and Solana for Spaceflights (Decrypt)
• Rumble Gains on Plans to Acquire Tether-Affiliated Northern Data (CoinDesk)
• Senate Banking Committee Democratic employees slam GOP crypto draft invoice as ‘superhighway’ for dodging regulation (The Block)