Three Reasons Why Bitcoin (BTC USD) Price Rallied Over 8% This Week

Bitcoin (BTC USD) just clocked a new ATH above $118,000 after rallying by over 9% this week. But even more noteworthy were the reasons behind this latest explosive performance. Here are the top 3 reasons.

The latest upside may have been triggered by a supply shock. While the latest headlines read that holders were 100% in profit, the level of sell pressure remained weak.

Moreover, the bullish performance was backed by aggressive Bitcoin outflows from exchanges. CryptoQuant data revealed that exchange reserves dipped below 2.4 million coins.

The aggressive exchange reserve outflows continued even though BTC experienced resistance at the $110,000 price level since the last week of May.

In other words, the sustained exchange outflows revealed that it was only a matter of time until a breakout occurred, driven by buying pressure.

Whale Activity Provides Bullish Boost For Bitcoin (BTC USD)

Earlier in the week, whales demonstrated a selloff in the spot market but executed large bullish positions in the derivatives segment.

The spot outflows from whale addresses may have triggered a false selloff, but market activity may have misled retail traders.

Recent data revealed that there was a shift in whale activity since mid-week, this time in favor of aggressive accumulation for Bitcoin (BTC USD).

In other words, robust liquidity injection from the whale cohort contributed significantly to BTC’s foray into new highs.

Most of the spot sales were observed on Binance, while whales were predominantly active on Coinbase.

However, according to a recent CryptoQuant analysis, Binance whales took over with the recent surge.

But despite these observations, market data also revealed that there was heavy profit-taking on the way up. This was also accompanied by heavy short positions.

For example, Coinglass data revealed that there was about $95 million worth of spot sales and about $8.8 billion in filed long positions compared to $2.2 billion in filled short positions on Binance.

The aggressive short positions highlighted another major reason behind the recent rally. Heavy short liquidations triggered a short squeeze where liquidated accounts may have been forced to buy in order to cover their shortfalls.

More than $654 million worth of short positions were liquidated in the last 24 hours, according to Coinglass.

Bitcoin ETFs Registered Aggressive Inflows

Institutions also played their part in the latest Bitcoin (BTC USD) rally. BTC ETFs maintained overall positive flows in the last 30 days, with only one day of negative flows recorded on 1 July.

Even more impressive was the fact that Bitcoin ETF recorded $1.17 billion worth of inflows on 10 July. This broke the record as the highest ETF inflows recorded in a single day.

BlackRock’s Bitcoin ETF recorded the highest inflows among all the ETFs at $448.5 million. This boost from the institutional class of investors may have aided the BTC bulls.

The sudden shift into extremely bullish sentiment may have also been influenced by news of Jerome Powell’s decision to step down as the SEC chairman.

Why Bullish Sentiment Prevails

That decision reignited prospects of lower rates and thus the bullish sentiment. BTC price was still trading above $118,000 at press time, which confirmed that there was still some bullish momentum.

However, it was also worth noting that it pushed close to price levels that some analysts predicted to be its top before the end of 2025.

The prospect that Bitcoin (BTC USD) could reach its 2025 peak may encourage a surge in short-term sell pressure. The fact that whales were observed to be taking profits could also signal a potential cooldown during the weekend.

Bitcoin (BTC USD) was already oversold at press time, and it also formed a bearish divergence with its RSI.

This could signal that the bears may rise up to challenge the bulls, driven mostly by profit-taking. On the other hand, more upside remained possible if the short squeeze prevails.