Hi readers, In today's newsletter, positive policy developments coupled with technical indicators point to bitcoin and the cryptocurrency market being well-placed to explode to new trading highs, writes Biyond's Nathan Batchelor. Then, Kelly Ye and Helena Lam of Avenir Group explore how liquidity indicators could reveal underlying capital flows and liquidity conditions for ether, and how there may still be ample room for expansion as institutional interest accelerates. Webinar alert: On September 9 at 11:00am ET join Michelle Noyes from AIMA and Andy Baehr from CoinDesk Indices as they discuss building a sustainable business in the cyclical markets of crypto. Register today. https://aima-org.zoom.us/webinar/register/4917558078322/WN_3jAGIrqMTK2z7e74q5bkWg#/registration Event alert: CoinDesk: Policy & Regulation in Washington D.C. on September 10th. The agenda includes senior officials from the SEC, Treasury, House, Senate and OCC, plus private roundtables and unparalleled networking opportunities. Use code COINDESK15 to save 15% on your registration. http://go.coindesk.com/4oV08AA. Thanks for joining us. |
|
|
Bitcoin Market Projection for the 2nd Half of 2025 |
Price outlook Our analysis for the remainder of 2025 forecasts bitcoin reaching a target of $150,000 to $160,000 driven by a Fed policy pivot and rate drop expectations in the United States, beneficial liquidity conditions and the increasingly positive crypto regulatory environment. The latest announcement from the Trump administration allowing cryptos into 401(k)s adds an extra layer to the crypto adoption narrative, and a clear pathway to expanding the existing crypto market cap via the estimated 9 trillion USD retirement market in the United States. Ongoing crypto catalysts |
- Liquidity conditions: Ongoing liquidity injections from the PBOC and the overall expansion of Global M2.
- Corporates & funds: Institutions are putting their balance sheets to work in bitcoin like never before. Additionally, the number of bitcoin and ether funds continues to rapidly grow.
- ISM survey is expected to rise above 50.0. When the ISM survey goes into positive territory it has previously correlated with the start of "alt season."
|
Quantitative models and risks Our quantitative models remain positive and show significant scope for further upside in bitcoin and the broader market: |
- Our Vanguard model, which is a trend detection system, continues to generate long conviction weekly signals.
- Weekly price closes above $119,000 will keep the bullish sentiment alive and cement the technical backdrop for further upside into uncharted waters for bitcoin.
|
- An acceleration of negative data points in the United States, leading to stagflation fears and risk-off over fears of a global slowdown.
- A significant pullback in the S&P 500 in Q3, possibly from the 6,660 level, which remains a primary target.
- Negative tariff headlines, and more specifically, a breakdown in Sino-U.S. trade talks.
- Extensive profit taking from ETF holders if bitcoin crosses $150,000 or even $160,000
|
Insights from Demark indicator Demark TD sequential monthly chart is pointing to a possible top at the end of the year with the index moving towards setup 9 and countdown 13. When the Demark indicator has approached 9 or 13 previously, it has signalled strong overbought exhaustion. |
Source: Symbolik Demark TD Sequential Crypto total market cap The potential breakout of the crypto total market capitalization chart presents another dynamic to the ongoing and previously mentioned bullish catalyst for the crypto market. Namely: |
- An initial Q3 target of five trillion USD.
- A broad-based crypto market rally encompassing the top 150 cryptos.
- Limited scope for downside under 4 trillion USD once a definitive chart breakout occurs.
|
Conclusion Bitcoin and the cryptocurrency market are well-placed to explode to new trading highs, with projections expected to reach between $150,000-160,000, and a five trillion USD market capitalization. Key upcoming risk events include higher CPI readings in the coming months and a halt in trade negotiations between the United States and China, although we feel it is far more likely a "kicking of the can" down the road and an extension of ongoing trade talks to appease markets. Based on all the positive developments surrounding bitcoin and technical indicators, a strong case can be made for further strong price appreciation running into year-end. |
|
|
Join the first major crypto regulation and policy gathering of the fall. CoinDesk: Policy & Regulation unites D.C.'s most important public officials with legal, policy and compliance leaders from the private sector. Don't miss keynotes representing the Senate, House, SEC, Treasury and OCC... and much more.
Space is limited. Use code CLS15 for 15% off your registration through Sept. 1. |
|
|
ETH Liquidity Check: Is it Catching Up with Bitcoin? |
In our previous research report titled Bitcoin's Liquidity Trifecta: Unpacking Liquidity Across On-Chain Data, Market Microstructure and Macro Drivers, we explored how various liquidity indicators could reveal underlying capital flows and liquidity conditions for bitcoin. Applying that same framework to ether (ETH) gives us valuable insight into its current liquidity profile — both on-chain and in the broader market. In this update, we also highlight the growing role of digital asset treasuries (DATs) which have emerged as a key driver behind ETH's recent rally. 1. Realized cap: measuring new capital inflows Realized cap tracks the net USD-denominated capital invested in a token, reflecting the cumulative cost basis of all holders. Since the cycle low in November 2022, ETH has absorbed over $81 billion in fresh capital inflows, pushing its realized cap to a new all-time high of $266 billion as of August 8th, 2025. For context, this represents a 43% increase for ETH over the period — substantial, but still well below bitcoin's 136% rise in realized cap. The slower growth rate suggests that while ETH has been attracting meaningful new investment, there may still be ample room for expansion as institutional interest accelerates. 2. Unhedged spot ETH ETF demand: tracking institutional allocation In our bitcoin study, we developed a method to estimate genuine institutional demand by isolating ETF inflows not tied to hedged arbitrage trades. Applying this framework to ETH shows that 80–90% of spot ETH ETF inflows are likely genuine institutional allocations, with the remainder driven by arbitrage strategies — long spot positions hedged via CME futures to capture price differentials. Interestingly, the proportion of arbitrage-related flows is much higher for ETH than bitcoin, where only around 3% of spot ether ETF inflows are estimated to be arbitrage-based. This highlights that institutional allocation to ETH still lags behind BTC, though we expect this gap to close gradually with the recent influx of institutional interest in the cryptocurrency. |
Data source: Avenir, CFTC, Glassnode 3. Futures and options open interest: gauging derivatives growth As of July 21st, combined open interest (OI) in ETH futures and options stood at $71 billion. However, unlike bitcoin — where OI in perpetual futures and options is nearly balanced — ETH options OI remains less than half of perpetual futures OI. Given that options are more often used by professional traders and institutions, this imbalance indicates that institutional derivatives participation in ETH still has significant room to grow. 4. Limit order book imbalance: reading market sentiment Order book analysis reveals notable sentiment shifts. When ETH regained $3,800 in July after 7 months, a strong sell-side skew emerged on the limit order books (LOB), suggesting intense, long-awaited profit-taking. But as the price retraced toward $3,300, buy-side depth increased significantly, signaling "buy-the-dip" behavior at that level. Since then, the order book has shown a more balanced supply-demand profile, suggesting no extreme positioning from the market at present. |
Data source: Avenir, Binance 5. Digital asset treasuries (DATs): growing structural buyers of ETH A new and increasingly important source of demand for ETH comes from DATs — corporations that diversify into ETH by holding it on their balance sheets. For example, Bitmine and Sharplink are two of the most notable representatives of this trend. Since April, DATs have accumulated roughly 4.1 million ETH ($17.6 billion), representing about 3.4% of the circulating supply; Bitmine alone accounts for 1.3%. For context, U.S. spot ETH ETFs currently hold 5.4% of ETH total supply. This highlights the scale of these structural allocations from DATs. What sets DAT flows apart is their long-duration nature. Unlike futures traders or ETF arbitrage inflows, treasury allocations are less likely to rotate capital frequently, making them a source of sticky structural demand. Conclusion Across on-chain and off-chain liquidity metrics, one theme is clear: ETH's institutional participation is still in the early stages compared to bitcoin. Realized cap growth, ETF inflow composition and derivatives market structure all point to significant untapped potential. At the same time, DAT allocations are becoming a powerful driver of sustained ETH flows, much like how corporate balance sheet strategies such as Strategy created a new structural demand channel that helped fuel bitcoin's rally in late 2024. If institutional adoption of ETH follows a trajectory similar to bitcoin's, the coming months could see meaningful capital inflows, and with them, the potential for outsized performance. |
|
|
Crypto's Most Influential Event returns in 2026.
Dealmaking. Networking. Big moves. Consensus 2026 is where the industry's top players connect, innovate, and build what's next.
Register early to lock down our best deal. |
|
|
|
0 Comments