Bitcoin Surges 60% From April Lows, Outperforms Gold

Bitcoin has surged past $118,000, marking a new all-time high. However, this milestone is just the beginning of a more significant journey for the cryptocurrency. To truly demonstrate its strength, Bitcoin must outperform other major assets such as gold and the British pound on a relative basis. Since July 9, Bitcoin has risen from $108,000, with minimal pullbacks, indicating a robust bull run. It has gained 60% from its April lows, when tariff concerns shook the market. Notably, for the first time since February, Bitcoin has surpassed gold in year-to-date performance, rising 27% compared to gold’s 26%.

The surge in Bitcoin's price has led to significant liquidations, particularly at the $112,000 level, which was a well-defended position. Heavy short positions at this level have fueled further upside momentum. Additionally, U.S. crypto stocks are higher in pre-market trading, reflecting the positive sentiment in the market. The Bitcoin network hash rate, which measures the computational power used to mine the proof-of-work blockchain, has rebounded above 915 exahashes per second (EH/s), signaling strong network participation. A significant difficulty adjustment exceeding 7% is likely over the weekend.

Looking ahead, one key risk that could derail Bitcoin’s momentum is the U.S. inflation data, due July 15. Last month, headline inflation printed at 2.4%, while core inflation came in at 2.8% year over year. For any hopes of rate cuts to remain intact, these numbers will need to trend lower. Stay alert!

Bitcoin's dominance rate is about to penetrate the uptrend line, indicating that alternative cryptocurrencies may outperform Bitcoin in the near future. This technical analysis suggests that investors may be shifting their focus towards other cryptocurrencies, potentially leading to a more diversified market. The impending breakdown in Bitcoin's dominance rate could signal a period of outperformance for alternative cryptocurrencies relative to Bitcoin.

In the broader market, the total amount of DeFi loans outstanding has increased to nearly $28 billion, topping the previous lifetime high of $26.4 billion in December. This acceleration in the on-chain lending business indicates investor willingness to take more risk, reflecting a growing confidence in the cryptocurrency market. The increase in DeFi loans outstanding suggests that investors are increasingly comfortable with the risks associated with decentralized finance, potentially leading to further growth in the sector.