The bull run continues! 3 factors suggest that BTC’s price will continue its upward trend

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

The CryptoCompare report released by Bitcoin futures exchange BitMEX shows:

“In July, trading volumes on top-tier exchanges grew 42.1% to $334 billion, while volumes on second-tier exchanges fell 38.1% to $224 billion. Top-tier exchanges now account for 60% of all spot trading.”

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

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

While spot markets stagnate, derivatives markets continue to grow

According to the data, the cryptocurrency derivatives market is growing faster than the spot market. In July, derivatives trading volume soared by 13.2%, while spot trading volume fell slightly. The report shows:

“Derivatives volumes increased by 13.2% in July to $445 billion. At the same time, the total spot volume decreased by 0.5% to $639.1 billion. As a result, derivatives continued to increase their market share, accounting for 41% of the total market share in July (38% in June).”

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

This data can be analyzed in two very different ways. It could mean that there is an overall increase in demand for Bitcoin among traders, or that the market has become overheated. When the futures market becomes a major catalyst for the Bitcoin market, it increases the likelihood of a major surge.

Since futures contracts are leveraged, with top exchanges offering up to 100x leverage, this could increase the likelihood of a long squeeze if the spot market fails to adequately supplement futures volumes.

The researchers explained that spot market volumes are now climbing in tandem, albeit at a slower pace. The researchers noted:

“Amid the current bull run, spot volumes picked up again in late July. After CryptoCompare updated its benchmark ranking of exchanges in July, data showed that riskier exchanges generally saw a reduction in trading volumes as users began to move to less risky (top) exchanges.”

It remains to be seen whether spot volume and mainstream sentiment will be high enough to push Bitcoin price above the major resistance level of $12,500.

Bitcoin weekly chart. Source: TradingView.com

Bitcoin is growing in popularity

On August 14, TradingView revealed that Tesla stock is the most viewed asset in the United States on the platform. It is followed closely by Bitcoin, which has risen 60% since January. TradingView said:

“Tesla stock is the most popular asset in the U.S. Our data shows that throughout July, Tesla was the most viewed stock in 31 U.S. states. Bitcoin is a close second. Tesla’s stock price has almost tripled since the beginning of the year. Meanwhile, Bitcoin is up 60% year to date.”

While spot volumes lag, futures volumes and Bitcoin’s popularity among retail investors appear to be rising.

The highest computing power in history

On August 16, the Bitcoin blockchain network’s computing power hit a new all-time high, reaching 120.7 million terahash/s.

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 future Bitcoin prices to rise.

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