Bitcoin’s 25% Rally Backed by Strong Market Liquidity, Data Shows

Bitcoin jumped nearly 25% last week, climbing above $80,000 in its best weekly performance in more than three years. Strong ETF inflows and the US Treasury’s bond buyback announcement helped fuel the move, but a less discussed factor may reveal whether the rally reflects genuine buying pressure or just a handful of large trades pushing prices around.

Why Market Depth Matters

That factor is order book liquidity, which measures how easily large trades can be executed without causing wild price swings. When liquidity stays strong during a rally, it typically signals real capital flowing in to support the move. When liquidity is thin, a rally can be driven by just a few oversized orders, a weaker sign for the trend’s staying power.

The Numbers Tell a Steady Story

According to Research, average market depth within 0.5% of Bitcoin’s price sat around $9.6 million on August 18, the day the rally began. That figure closely matches a record high from January and exceeded depth levels seen back in October when Bitcoin traded above $120,000. By August 25, when Bitcoin hit $80,000, depth eased slightly to $8.7 million but stayed within normal ranges.

A Notable Signal During a Quiet Season

This steadiness stands out because August is typically the year’s thinnest month for trading liquidity, as desks scale back activity during summer. Holding firm through that stretch, in the middle of a 25% price surge, suggests buyers were being genuinely absorbed rather than the market simply running through empty order books. Ether and Solana showed similar patterns in their own order books.

Analysts suggest liquidity could strengthen further as traders return from summer breaks, potentially keeping conditions favorable for continued buying interest.