What's Next for Bitcoin After Historic Rally? Experts Weigh In
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CryptoQuant: Bitcoin's next parabolic rally may require over $1 trillion in new funding.
According to data from CryptoQuant, as reported by Mars Finance, the capital efficiency of each Bitcoin bull market is decreasing significantly. In the 2011 cycle, approximately $2.8 billion in net inflows drove a gain of about 55,000%; in 2015, approximately $69 billion corresponded to nearly 10,000%; in 2018, approximately $365 billion corresponded to about 2,000%; and in this current cycle, since 2022, approximately $697 billion has generated only a 689% return. In 2011, approximately $5 million in new funds could double the price of Bitcoin, while in this cycle, approximately $101 billion is needed. CryptoQuant founder Ki Young Ju stated that this means Bitcoin needs to become a core macro asset rather than just a retail-driven ETF, and the next parabolic rally would need to absorb over $1 trillion in new funds, far exceeding current institutional adoption levels. However, this argument faces real-world challenges: US spot Bitcoin ETFs have seen record outflows over the past month, Bitcoin ended the first half of the year with losses, and retail funds are withdrawing rather than institutional funds accelerating their inflow.
Analysis: Demand in the US market remains weak, making it difficult for Bitcoin's July rally to continue.
According to Mars Finance, on July 7th, multiple indicators suggest that Bitcoin's July rally remains fragile. One of the most closely watched indicators, the Coinbase Premium Index, has been negative for 50 consecutive days. This indicator measures the price difference of BTC on the US trading platforms Coinbase and Binance. The continued underperformance of BTC on Coinbase compared to Binance indicates relatively weak demand in the US market. Meanwhile, US spot Bitcoin ETFs have seen net outflows for eight consecutive weeks, whereas historically, Bitcoin bull runs have typically been accompanied by a consistently positive Coinbase Premium Index. Japanese bond yields continue to rise, with the 10-year Japanese government bond yield reaching a 30-year high, pushing up borrowing costs in the US, UK, and Germany. If US Treasury yields continue to rise, it could pose resistance to BTC. Bitfinex analysts stated that structural institutional buying remains unverified until BlackRock's IBIT resumes its sustained inflows. Singapore-based crypto trading firm QCP Capital stated that if the spot Bitcoin ETF continues its trend following last Friday's return to inflows, the short-term outlook remains constructive. The agency added that if BTC clearly reclaims $64,000 this week, it will further boost market sentiment and alleviate market concerns about Strategy (MSTR), a publicly traded Bitcoin holding company.
On the eve of SPCX's inclusion in the Nasdaq: Retail investors tend to be bullish and chase the rally, but whale place a $4.4 million sell order above.
According to BlockBeats, on July 7th, Hyperinsight monitoring showed that SPCX would be officially included in the Nasdaq 100 index before the US stock market opened today. However, Hyperliquid showed no signs of a one-sided long position. As of press time, SPCX was trading at $156.2, with a 24-hour trading volume of approximately $290 million. The large order book structure shows approximately $4.96 million in short covering buy orders in the $135-$155 range, while approximately $4.45 million in sell orders are located above this range of $156.3-$175.0. The SPCX order book is as follows: - Short covering/profit-taking buy orders: 116 orders, price range $135.0 - $155.1, approximately $4.95 million; - Sell orders at the top: 26 orders, price range $156.3 - $175.0, approximately $4.44 million; - Below are 17 buy orders, with a price range of $147.5 - $155.9, totaling approximately $1.8 million. Among the three types of orders, short covering buy orders ranked first in both number and size. Coupled with selling pressure above, large funds intend to "distribute at higher prices and buy back at lower prices". On the open interest side, there is a stratification between long and short positions, with the degree of shortness increasing progressively with position size, indicating that retail investors tend to be bullish. - Fully visible positions of $100,000 or more: 183 trades, totaling approximately $141 million, with a short/long ratio of approximately 1.15; - Large positions exceeding $1 million: 17 transactions, totaling approximately $55.76 million, with a short/long ratio of approximately 2.06; - Small to medium positions of $100,000 to $1,000,000: Long/Short ratio of approximately 1.25, which is the only level with a net bullish bias. At the whale cost line, the weighted cost of large long positions is about $164.59 and the weighted cost of short positions is about $169.68, both higher than the current price. Short positions are generally in profit while long positions are generally trapped. On the liquidation line, the most recent short liquidations are concentrated around $195.7 to $198.0, totaling approximately $10.44 million; long liquidations are mainly located around $97 and $110, both of which are far from the current price.
Yi Lihua: Bitcoin needs a strong breakout above 68,000 to confirm a reversal; otherwise, it will likely test lower levels again.
According to BlockBeats, on July 7th, Yi Lihua, founder of Liquid Capital (formerly LD Capital), stated, "(Bitcoin) is currently still in a downtrend on the weekly chart. Only a strong breakout above 68,000 will lead to a decent reversal. If it fails to break through, it will retest the bottom. Hopefully, we won't see a terrible situation like falling below 47,000." "Regardless, in the coming months, we'll be fully prepared to buy the buy the dips, and be greedy when others are fearful. Besides mainstream coins, we're also looking for coins buy the dips for a 100x increase in the next bull market. Render, which we invested in during the last dip, saw a maximum increase of nearly 180x. Although most coins are worthless, a very few offer significant opportunities. First, they must have fallen by more than 95% due to market conditions. Second, the founders must be highly capable, their direction must align with trends and essential needs, such as AI, and ideally, they should be financially sound and profitable."
Analysis: The Bitcoin "buy the dips index" AHR999 has dropped to 0.32, near its historical low.
According to Mars Finance, on July 6th, analyst Gaah wrote that the Bitcoin AHR999 index has currently fallen to 0.32, near its historical low. This indicator measures the deviation of Bitcoin's current price from its long-term fair value and is often used to develop Dollar-Cost Averaging (DCA) strategies. When the AHR999 index is below the "buy zone," it is generally considered a good time to allocate for the long term, helping to avoid chasing high prices during rapid increases. Currently, Bitcoin is in a phase of finding a bottom and attempting to reverse its bear market trend, and the overall risk-reward ratio has become quite attractive.
Wintermute: Bitcoin's rise is more in line with the characteristics of a "relief rally" than the start of a new bull market.
According to Mars Finance, on July 7th, Wintermute released a market analysis stating that the latest US non-farm payroll data significantly missed market expectations, coupled with Warsh's speech being interpreted as dovish, driving a general rebound in global risk assets, with the crypto market performing the best. Bitcoin and Ethereum have both significantly outperformed the S&P 500 and Nasdaq indices recently. Bitcoin's current rally has a more solid foundation, mainly driven by continued whale buying, options fund flows towards call options, and improved on-chain data. The end of net outflows from Bitcoin spot ETFs also boosted market sentiment. The cooling US job market has further reduced market expectations for interest rate hikes this year, while Warsh reiterated the 2% inflation target at the Sintra Forum but did not release more hawkish signals, which investors interpreted as a more dovish stance from the Federal Reserve. In the crypto market, on-chain data shows that whale wallets have accumulated over 270,000 BTC near the 200-week moving average, while options market funds have shifted from hedging positions to call options with strike prices of $60,000 to $70,000. Meanwhile, Ethereum's rise is largely driven by institutional narratives, including the official launch of Ethereum Institutional and the continued progress of institutional tokenization infrastructure. However, the Ethereum Foundation's recent layoffs of approximately 20% and budget cuts of about 40%, along with previous outflows from ETH ETFs, still reflect some pressure on its fundamentals. This round of gains is more characteristic of a "relief rebound" than the start of a new long-term bull market. Improved macroeconomic environment, easing tensions in the Middle East, continued institutional investment in Ethereum, and low liquidity during the summer have all contributed to the market recovery. However, from a funding perspective, Bitcoin spot ETFs have seen cumulative outflows of approximately $2.73 billion this year. Until ETF fund flows continue to improve and form a trend, the market should still view the current situation as a sentiment correction rather than a structural reversal, and remain cautious about the future.