This round of rebound occurred against a backdrop of low trading volume, with sellers even dominating the market.

Written by: Blockchain Knight

Bitcoin has once again risen to the crucial position of $66,000 after more than a month, with a cumulative rebound of over 12%.

Although the price has come back, the signals revealed by the market atmosphere and funding structure are quite twisted, and it doesn't seem like a reassuring rise.

In the past 30 days, the average daily trading volume of Bitcoin spot was only $5.1 billion, nearly 30% lower than the historical average since 2019. The price is rising, but the number of participants has not increased, and trading volume has shrunk.

In other words, this round of rebound occurred amidst low trading volume, with sellers even dominating the market.

In this environment, price changes are sensitive to buy and sell orders, and it does not require too much capital to pull it up. However, conversely, once selling pressure increases, the speed of decline may not be slow either.

The derivatives market has also not given any signals for a return to normal. The open interest in perpetual futures has dropped from $35.7 billion over two months ago to around $29.4 billion. Although the funding rate has turned positive, it remains far below the historical average.

Moreover, it is worth noting that the premium for put options in the options market is still nearly 50% higher than that for call options, and this level of skew has only been more extreme than now for 10% of the time since 2021. Traders are still spending money to buy insurance, not believing that this round of rise can continue.

However, the good news is that the U.S. spot Bitcoin ETF has recorded net inflows for several consecutive days, amounting to over $930 million, marking the longest streak of inflows since early May. In the previous two months, around $2.4 billion had flowed out.

Additionally, whales holding 1,000 to 10,000 BTC have increased their holdings by approximately 66,700 BTC over the past 60 days, which is the largest accumulation by this group since February of this year. Large funds have been purchasing during the panic selling by retail investors, objectively tightening the market's circulating supply.

Furthermore, about 78.5% of the Bitcoin supply has not moved for at least six months, with over 60% not moving for more than a year.

This proportion is also rising, and historically, when it exceeds 60% and continues to increase, subsequent returns are often good. But history is history; the current biggest issue is whether new demand can be sustained.

Of course, there are some not-so-good things in the market. The Federal Reserve's monetary policy meeting is approaching next week. Although the market broadly expects no change, the statement after the meeting is key. After all, oil prices have been steadily rising recently, adding a lot of uncertainty to the inflation outlook.

Bitcoin breaking through $66,000 has technically broken the downward structure, which is a good sign. Coupled with the funding sources supporting this rise being ETFs and whales, which are relatively smart and patient money, it seems we should be fortunate.

But the downside is also quite obvious; retail investors and active traders have not yet caught up, spot trading volume is too low, the derivatives market is still focused on preventing declines, and there are significant uncertainties in the macro window, so the solidity still needs to be tested.

Therefore, going forward, in addition to closely following macro-level news and market trading data, it is even more important to pay attention to whether $66,000 can be firmly established; otherwise, the test will continue.

If a downward trend is established, then this round of rebound appears more like a tentative offense led by large capital rather than a signal of emerging from the bottom.