Bitcoin Bull Run Continues? 3 factors indicate that the price of BTC will maintain an upward trend

Since July 1, the price of Bitcoin (BTC) has risen from $9,088 to $11,800, an increase of more than 30%. Trading volumes on top cryptocurrency exchanges surged to a staggering $334 billion.

The CryptoCompare report released by the bitcoin futures exchange BitMEX shows:

“Trading volume on top-tier exchanges rose 42.1% to $334 billion in July, while volume on second-tier exchanges fell 38.1% to $224 billion. Top-tier exchanges now account for 60% of total spot trading volume.”

The $334 billion does not include so-called "second-tier" exchanges, the researchers said.

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Trading volumes on top exchanges continue to grow Source: BitMEX, CryptoCompare

Derivatives Markets Continue to Grow While Spot Markets Stall

According to the data, the cryptocurrency derivatives market is growing faster than the spot market. In July, derivatives trading volumes surged 13.2%, while spot trading volumes fell somewhat. The report shows:

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“Derivatives trading volume increased by 13.2% to $445.0 billion in July. At the same time, the total volume of spot transactions decreased by 0.5% to $639.1 billion. As a result, the market share of derivatives continued to increase, accounting for the total market share in July 41% (compared to 38% in June).”

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The trend points to growing demand for cryptocurrency futures and options contracts, often traded in derivatives by professional and full-time traders.

These data can be analyzed in two distinct ways. This could mean that there is an overall increase in demand for Bitcoin among traders, or that the market is already overheating. When the futures market acts as a major catalyst for the Bitcoin market, it increases the likelihood of a major surge.

Because futures contracts are leveraged, with top exchanges offering up to 100x leverage, it could increase the likelihood of a long squeeze if the spot market doesn't adequately replenish futures volume.

The researchers explained that the spot market volume is currently climbing in tandem, albeit at a slower pace. The researchers noted:

“Amid the current bull market, spot trading volumes picked up again in late July. After CryptoCompare updated its benchmark rankings of exchanges in July, data showed that trading volumes on riskier exchanges generally fell as users began to switch to riskier exchanges. low (top) exchanges."

Whether spot trading volumes and prevailing sentiment will be high enough to push the price of Bitcoin above the major resistance at $12,500 is uncertain.

Bitcoin Weekly Chart Source: TradingView.com

Bitcoin is growing in popularity

On August 14, TradingView revealed that Tesla stock was the most viewed asset in the U.S. on the platform. It is followed by bitcoin, which is up 60 percent since January. According to TradingView:

“Tesla stock is the most popular asset in the U.S. Throughout July, Tesla was the most viewed stock in 31 U.S. states, according to our data. Bitcoin is not far behind. Since the beginning of the year, Tesla has Shares of Tesla have nearly tripled. Meanwhile, Bitcoin is up 60% year-to-date.”

While spot trading volumes are lagging, futures trading volumes and Bitcoin’s popularity among retail investors appear to be on the rise.

Historically Highest Hashrate

On August 16, the computing power of the Bitcoin blockchain network reached an all-time high of 120.7 million terahash/s per second.

The rising hash rate is close to the last Bitcoin halving in May, which indicates that the mining industry is stable and that miners expect the price of Bitcoin to rise in the future.

The combination of overall growth in cryptocurrency market volume, Bitcoin’s growing popularity among retail investors, and rapidly rising hashrate may help sustain the current upward trend in Bitcoin’s price.

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