Asia Morning Briefing: Bitcoin’s Thin-Liquidity Bounce Raises Questions on Staying Power
By Sam Reynolds, Edited by Aoyon Ashraf | August 12, 2025
Bitcoin staged a sharp recovery over the past week, rebounding from a dip below $114,000 to trade near $121,000, marking a significant move toward recent all-time highs. However, this bounce has prompted market watchers to question the sustainability of the rally due to its reliance on thin liquidity and derivative-driven positioning rather than broad spot-market participation.
Bitcoin’s Recovery: Driven More by Positioning Than Buying
According to a recent Glassnode report, the bitcoin market has shifted from a phase of “seller exhaustion” to a “strong rebound” near recent all-time highs (ATHs). Yet, the recovery came without a corresponding surge in spot market activity. Glassnode data indicated that spot trading volumes actually dropped 22% to $5.7 billion—hovering near their statistical low range. This suggests that the price bounce was propelled more by shifts in trader positioning than deep, conviction-driven buying across a large base of participants.
Supporting this view, the Spot Cumulative Volume Delta—which measures net buy-sell pressure—flipped 94% towards buy pressure. This change indicates a replacement of aggressive selling with renewed demand, albeit from a relatively narrow group of traders.
Derivatives Market Shows Increased Activity, but Complacency Persists
In contrast, the derivatives market saw a considerable uptick in activity. Leveraged traders re-engaged aggressively, with Glassnode noting an 88% jump in the Perpetual Cumulative Volume Delta—a key indicator of buy-sell momentum in perpetual contracts. Funding rates remained elevated, hinting at bullish sentiment, and options open interest rose by 6.7% to $42.4 billion. However, interestingly, volatility pricing collapsed by nearly a third, signaling complacency often observed before major market moves.
ETF Flows Show Some Relief Despite Low Volumes
U.S.-listed spot bitcoin ETF flows provided some relief as outflows halved to $311 million from $686 million in the previous week. But trading volumes for ETFs fell 27.7% to $13.7 billion, keeping activity near the lower end of the historical range.
Thin Order Books and Macro Optimism Fuel Volatility
QCP Capital, a Singapore-based trading firm, attributed the weekend surge—which briefly pushed bitcoin above $122,000—to thin order books combined with a broader risk-on environment in global markets. The firm noted that this crypto comeback coincided with a rebound in U.S. equities and growing market expectations for a Federal Reserve rate cut in September.
On-chain metrics also show some improvement, with active bitcoin addresses jumping 8.4% to 793,000 and fee volumes rising 10%. However, caution remains as Glassnode highlighted that high profitability can quickly morph into selling pressure should market sentiment deteriorate. Currently, 94.1% of bitcoin supply is in profit, with the realized profit-to-loss ratio at 1.9, indicating many holders stand to gain if they sell—potentially fueling profit-taking.
Market Outlook: Volatility Expected Ahead of U.S. CPI Report
The combination of thin liquidity, bullish derivatives positioning, and optimism driven by broader macro factors sets bitcoin up for potential volatility as it approaches all-time highs. Market participants are closely watching Tuesday’s U.S. Consumer Price Index (CPI) release, which could serve as a key catalyst for the next major price move.
Polymarket trader sentiment leans toward a modest CPI uptick consistent with consensus forecasts. Such an outcome is expected to keep bitcoin consolidating near current levels. However, a hotter-than-expected CPI print could pressure bitcoin prices by delaying anticipated Fed rate cuts. Conversely, softer inflation data might spur a breakout, especially if ETF flows and spot market activity pick up.
Broader Market Highlights
- Ethereum (ETH) is trading near $4,200, with analysts attributing recent gains to improved on-chain capacity and reduced decentralized finance (DeFi) costs.
- Gold edged down to $3,355.13 amid upbeat risk sentiment and political developments, including former President Trump’s pledge to exempt gold from tariffs. Nonetheless, rising bets on Fed rate cuts cushioned losses.
- Asia-Pacific Equity Markets rose, led by Japan’s Nikkei 225 hitting record highs following a U.S.-China trade truce extension. Investors also anticipate a Reserve Bank of Australia rate cut.
- The S&P 500 slipped 0.2% but remains close to record levels as investors await fresh inflation data. Citigroup and UBS have recently raised their year-end S&P 500 targets, citing easing policy risks and strong corporate earnings.
Other Noteworthy Crypto News
- Jeff Bezos’ Blue Origin announced it now accepts Bitcoin, Ethereum, and Solana as payment for spaceflights.
- Rumble gained attention with plans to acquire Tether-affiliated Northern Data.
- The Senate Banking Committee’s Democratic staff criticized a GOP crypto bill draft, calling it a potential “superhighway” for regulatory avoidance.
Conclusion
Bitcoin’s recent rebound highlights a market driven by speculative positioning and macroeconomic optimism amid thin liquidity conditions. While the bounce appears robust on the surface, key metrics caution that sustained upward momentum depends on broader market participation and favorable upcoming data, particularly the U.S. CPI report. Traders and investors should brace for possible volatility in the near term.
This article was produced with editorial oversight and fact-checking from CoinDesk’s team, with generative AI tools assisting in drafting.
About the Author:
Sam Reynolds is a senior reporter based in Asia and a member of the CoinDesk team awarded the 2023 Gerald Loeb Award for breaking news coverage of the FTX collapse.
Stay updated with Asia Morning Briefing and CoinDesk’s Crypto Daybook Americas for detailed market analysis and news in the cryptocurrency space.