Asia-US Liquidity Tug-of-War Could Ignite Next Bitcoin Rally

Bitcoin’s recent price trajectory appears to be increasingly influenced by the interplay between U.S. institutional demand and Asian retail activity, according to recent on-chain and exchange data. A report from CryptoQuant highlights how regional liquidity dynamics have replaced traditional whale-driven price movements, shaping Bitcoin’s short-term volatility and potential for sustained rallies.

Historically, large holders—often referred to as whales—played a dominant role in Bitcoin price action. However, the data suggests a shift: U.S. institutional behavior, particularly on Coinbase, and Asian retail trading activity on Binance now serve as key indicators. The Coinbase Premium Index (CPI), which measures the price gap between Coinbase and Binance, has become a critical metric. When CPI is positive, it indicates strong U.S. demand and typically precedes durable price increases. This pattern was evident in previous cycles and is expected to be a key factor in Q4.

Meanwhile, Binance inflows and outflows reflect Asian retail sentiment. Large inflows often precede sell-offs, while outflows can signal dip-buying activity. The Korea Premium Index (KPI), known for tracking the Kimchi Premium, provides further insight into Asian demand. Moderate KPI readings (between +1% and +3%) indicate healthy buying interest, while levels above +5% often correlate with speculative overheating and short-term tops.

When CPI and KPI readings align positively, global demand for Bitcoin is synchronized, leading to explosive price movements. Conversely, divergences—such as U.S. investors taking profits while Asian traders continue buying—can lead to volatile swings and time-zone-driven price shifts. This tug-of-war between regional liquidity underscores the evolving structure of Bitcoin’s market dynamics, moving beyond traditional whale-driven models.

Glassnode data also reflects recent market behavior, showing a rebound in short-term holder profitability to 60% after a dip. While this suggests a neutral but fragile market, further upward momentum hinges on Bitcoin reclaiming the $114,000–$116,000 range. If the price breaks below $104,000, analysts warn of a potential retest of the $93,000–$95,000 levels, reminiscent of previous exhaustion phases. Off-chain indicators, including neutral futures funding and declining ETF inflows, also highlight a cooling in speculative sentiment.

Looking ahead, the market will likely remain range-bound unless U.S. demand, as reflected in the CPI, turns decisively positive, and Asian markets continue absorbing supply. If this synchronization occurs, it could ignite a sustained rally. However, without such alignment, Bitcoin may face further bearish pressure. Analysts caution that while the current phase is characterized by “faith and optimism,” the market has not yet reached the euphoric levels seen in previous bull cycles—typically indicated by a NUPL (Net Unrealized Profit/Loss) of 0.7 to 0.8.

Source: [1] BTC rally bets on US institutional demand and Asia's retail (https://www.mitrade.com/insights/news/live-news/article-3-1095888-20250904) [2] Forget Bitcoin ETFs, Asia-US Liquidity Fight Will Decide (https://cryptopotato.com/forget-bitcoin-etfs-asia-us-liquidity-fight-will-decide-btcs-fate/)