Bitcoin Hits $118,000 ATH Despite Low Trading Volume

Bitcoin has reached a new all-time high (ATH) surpassing $118,000. However, on-chain data from Glassnode indicates that the trading volume for Bitcoin remains low despite this significant price increase. This discrepancy suggests that while the price has surged, the underlying market activity has not kept pace, which could have implications for the sustainability of the current rally.

Glassnode recently highlighted that Bitcoin trading volume had dropped to yearly lows, signaling a potential summer lull. Following the price breakout to new highs, Glassnode updated its data, showing that both spot and futures volumes had plummeted at the end of June and remained low into early July. Although there has been a slight increase in trading activity since the price breakout, the volumes are still historically low. This low liquidity could pose a challenge for the continuation of the rally, as historically, sustainable rallies have required significant trader participation to maintain momentum.

Glassnode noted that Bitcoin hit an ATH despite thin liquidity, a situation that warrants attention. The analytics firm also pointed out that a key Bitcoin indicator, the Net Unrealized Profit/Loss (NUPL) of long-term holders, remains outside the euphoria zone. The NUPL measures the net amount of unrealized profit or loss held by investors, with a specific focus on long-term holders who have held their coins for more than 155 days. Despite the recent price rally, the NUPL for long-term holders stands at 0.69, below the 0.75 level that has historically separated euphoric markets. This suggests that while profits have grown, the market has not yet reached a state of extreme optimism.

Glassnode's analysis indicates that this cycle has seen only about 30 days above the 0.75 threshold, compared to 228 days in the previous cycle. The last time the metric was above this level was in February. This data suggests that the current market sentiment is more cautious compared to previous cycles, which could influence future price movements. As of the latest update, Bitcoin is trading around $118,000, marking a 9% increase over the past week. The future trajectory of Bitcoin's price will depend on whether the recent uptick in trading activity can sustain the rally or if the market will revert to its previous low liquidity state.