- The BTC/USD pair must sustain above $116k to avoid a selloff towards $111k in August.
- The talk about Fed chair replacement has increased the odds of a rate cut in the United States before the end of 2025, which is bullish for crypto.
- High conviction by long-term holders has absorbed profit distribution from short-term holders.
Bitcoin has staged a strong rebound, climbing 2.1% in the past 24 hours to reclaim the key support level above $116,000. This bounce has rejuvenated bullish sentiment across the market, pushing the Fear and Greed Index up to 62, indicating “Greed.”
Adding to the positive signs, the derivatives market appears healthy. Only $262 million in positions was liquidated during the move, a low number that suggests the rebound is being driven by strong spot demand, not an overheated futures market.
The Bigger Picture: This recent dip-buying is part of a larger, unusual trend. Here’s our analysis on why many are calling this a “calm bull run.”
On-Chain Data: Why Did Bitcoin Bounce?
According to on-chain data analysis provided by Glassnode, Bitcoin price rebounded from a range of low liquidity below the support level around $116k and above $110k.
And as the price climbed from the $112k low, investors aggressively bought the dip, buying close to 120,000 BTC.
On-chain data analysis shows that short-term holders had increased their BTC distribution, as the short-term fears of further capitulation surged.
However, the high conviction by long-term holders has helped the gradual return of short-term holders. As a result, BTC price is aiming for a heated level for the short-term holders, based on the Cost Basis Model.
Could a 2017-Style “Crypto Summer” Be Next?
Bitcoin and the wider crypto market have in the past, followed an established path in the past major bull cycles. However, since the 2024 Bitcoin halving, Bitcoin has heavily outperformed the wider altcoin market fueled by low capital rotation by the institutional investors adopting BTC treasuries.
Since April, Bitcoin price has recorded positive monthly returns, akin to the crypto summer of 2017. Notably, BTC price recorded the highest gains in August during the 2017 bull cycle, thus signaling a possible repeat in the coming weeks.
Deep Dive: So where is this buying pressure coming from? CoinEdition had reported on the trend of traders on Binance selling ETH to buy BTC.
Why Are Institutional Investors Depicting High Conviction?
According to market data from SoSoVaLue, the U.S. spot BTC ETFs have recorded four consecutive cash inflows of more than $18 billion. Market data from BitcoinTreasuries, 289 entities have adopted BTC treasury management and have accumulated over 3.65 million coins.
The palpable high demand for Bitcoin is favored by a bullish technical outlook amid robust fundamentals. In the daily timeframe, BTC price has been forming a bullish continuation flag, with a midterm target of $130k.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
