Bitcoin price approaches $119,000 fueled by surge in liquidity – trading news
BTC-USD has broken into a parabolic structure, with institutional investors absorbing supply and global liquidity influencing price mechanics. Currently trading at $118,780 as of late July, BTC-USD is entering a high-friction zone around $119,500 where short positions are prevalent, and funding rates are extended. This upward trend is not solely technical but a convergence of monetary velocity with infrastructure development. The so-called banana chart by Peter Brandt, previously dismissed as parabolic speculation, is now in line with real-time trading. The curve that propelled Bitcoin from $12 to $69K is back in play, indicating a trajectory towards $200,000 by the end of the cycle, transforming from speculation to a structural aspect of the market.
As BTC-USD surged towards $119K, a significant liquidity sweep occurred. Traders with leveraged short positions between $118K to $119K experienced aggressive liquidations, aided by prominent whale wallets breaching clustered stop levels. Notably, Galaxy Digital sold over 80,000 BTC, yet the market absorbed this supply efficiently without significant slippage, showcasing a rare level of resilience. Bitcoin continues to trend upward while holding above its 10-day Simple Moving Average (SMA) and forming higher lows with support at $114,500. Anticipated liquidity levels rest at $126K and $131K, where funding rates and open interests in options begin to surge once more, demonstrating active attraction, supported by institutional investments.
The emergence of Bitcoin Exchange-Traded Funds (ETFs) has created a foundational demand floor above $100 billion. ETFs now hold over $150 billion in total, with BlackRock’s IBIT exceeding $84 billion in Assets Under Management (AUM) alone. These inflows are less speculative and more programmed, leading to reduced volatility during corrections and amplified upward movement when capital flows return to risk assets. ETF bids are not simply passive but deliberate, impacting market structure significantly. This shift towards ETF adoption has extended beyond mere trading assets to encompass macro collateral stored by corporations, treasuries, and institutions with prolonged investment horizons.
The invisible engine driving Bitcoin’s value is the global M2 money supply expansion. M2 money supply across key economies such as the US, China, EU, and Japan is rising rapidly, enhancing Bitcoin’s correlation with liquidity levels. Historical data indicates a correlation coefficient between Bitcoin value and global M2 ranging from 0.65 to 0.89, typically with Bitcoin trailing changes in M2 by 30 to 90 days. The current environment reflects a growing correlation, suggesting that the upcoming bullish trajectory in Bitcoin is fueled by expanding liquidity levels rather than retail investor sentiment.
Traditional four-year halving cycles are becoming less relevant as Bitcoin morphs into a global-macro asset. The 2024 halving reduced block rewards, but price action deviated from traditional patterns due to evolving market dynamics shaped by interest rates, ETF inflows, macro liquidity, and corporate investments. The dominance of Bitcoin relative to other cryptocurrencies has slightly decreased, but its structural significance remains unchanged, supported by ETF influences, sovereign purchases, treasury allocations, and institutional frameworks. While alternative cryptocurrencies like Ethereum and Solana may demonstrate short-term outperformance, Bitcoin retains a dominant position as a primary beneficiary of risk-on liquidity flows. On-chain metrics reveal increasing illiquidity and network strength, with exchange balances at record lows, and a high percentage of total supply remaining unmoved for an extended period, indicating a strong level of conviction among investors.
