Key Takeaways
After reaching an all time high, Bitcoin’s bullish netflows, compressed NVT Golden Cross, positive funding rates, and surging derivatives activity signal strong momentum and potential for a renewed parabolic rally.
Since early August, Bitcoin’s [BTC] exchange netflow metric has approached a notable bottom, mirroring patterns seen before the 2017 and 2021 rallies.
Historically, such lows often marked the start of the final explosive leg in past bull markets. On the 13th of August, Bitcoin hit an all-time high of $124,457 before retracing back to $120,895 at press time.
Reduced selling pressure from long-term holders is becoming evident.
Therefore, this suggests that the market may be entering a phase where supply constraints could intensify upward momentum in the coming weeks.
Is the NVT Golden Cross signaling a market turning point?
At the time of writing, the NVT Golden Cross stood at 0.2709 after plunging 53.92%, signaling a significant drop in valuation relative to transaction activity.
Historically, similar sharp declines aligned with market bottoms that preceded strong rallies.
This drop reflects a potential undervaluation of Bitcoin’s transaction network compared to its market cap. Therefore, if this pattern holds, Bitcoin could be positioned for a rebound phase.
Moreover, the rapid compression of this indicator reinforces the probability of renewed bullish activity, making it a critical metric for traders to watch closely.
Will positive funding rates continue to support bullish momentum?
The BTC OI-weighted funding rate was holding at 0.0137%, at press time, reflecting steady positive sentiment among leveraged traders.
Sustained positive funding suggests buyers are willing to pay premiums to maintain long positions, which often bolsters price stability in strong uptrends.
Therefore, this consistent funding backdrop may continue to support bullish momentum if sustained. However, if funding rates spike excessively, it could indicate overcrowded longs and potential corrections.
For now, the current readings suggest a healthy bullish bias without signs of over-leverage that might trigger sharp pullbacks.
Liquidations and derivatives data indicate…
Over the past 24 hours, Bitcoin saw $24.28 million in short liquidations against $17.16 million in longs, as of writing, signaling forced exits from bearish positions.
At the same time, derivatives metrics were climbing: trading volume surged 65.37% to $149.47 billion, Open Interest (OI) rose 4.14% to $83.76 billion, Options Volume jumped 127.92% to $9.43 billion, and Options OI gained 5.19% to $57.15 billion.
This combined data suggests both institutional and retail participants are increasing exposure, therefore amplifying market liquidity and volatility potential as Bitcoin trades just below its ATH levels.
Conclusively, Bitcoin’s alignment of historically bullish netflow patterns, deeply compressed NVT Golden Cross, positive Funding Rates, and rising derivatives activity paints a strong bullish outlook.
These factors collectively indicate that Bitcoin could be gearing up for another major upward push, potentially extending its parabolic phase.
