Bitcoin Fails to Rally Despite Positive News: Spot Volume at Lowest Since 2019

Bitcoin remains below $64,000 and has failed to rally despite positive inflation data, with spot exchange volume falling to its lowest level since 2019.

Bitcoin found no support on Thursday following two consecutive days of moderate inflation data. While the Producer Price Index (PPI) for July remained unchanged, service prices rose 0.2%, goods prices fell 0.7%, and the annual PPI landed at 4.7%. Unemployment claims came in at 209,000, exceeding the expectation of 202,000.

Glassnode viewed the market’s limited reaction to this data unfavorably. The firm stated that “A weak reaction to good news is a warning in itself,” noting that demand for Bitcoin remains lacking. According to the analytics firm, the price has been trapped for nearly three months between the $63,000 median realized price and the $68,700 short-term holder cost basis.

$58,500 and $68,700 levels are critical for Bitcoin

Glassnode data shows that spot exchange volume has dropped to its lowest level since 2019. The amount of Bitcoin changing hands has also fallen to a seven-year low, signaling a lack of interest in the market. Glassnode identifies $68,700 as major resistance and $58,500 as support. While reclaiming $68,700 on high volume could signal a recovery, losing $58,500 could increase selling pressure due to low liquidity and heavy long positions.

The institutional demand side did not present a strong picture either. Spot Bitcoin ETFs saw a net outflow of $61 million on Wednesday, while daily trading volume remained at $1.19 billion.

In contrast, analysts from FalconX and 21Shares painted a more positive scenario. FalconX noted that activity in call options and more limited sell-side positions indicate that investors are less cautious than in previous periods. 21Shares argued that the data could serve as a catalyst for Bitcoin. The diverging views of analysts highlight that the $58,500-$68,700 range remains crucial in determining the market’s direction.