Bitcoin Approaches $70,000! July 21 Assessment

Bitcoin has shown strong performance compared to traditional markets, surpassing $65,000 despite sharp sell-offs in technology stocks and rising U.S. Treasury yields. Ongoing inflows into spot Bitcoin ETFs support the rise, while large transfers by institutional investors to exchanges and trading platforms indicate that the cautious outlook in the market has not completely disappeared.

The Nasdaq 100 index fell below 20,800 points for the first time in five weeks due to concerns over high valuations in AI companies and profit-taking in chip stocks. Meanwhile, Bitcoin outperformed the stock markets by exceeding the $65,000 level during the same period.

Recovery in Asian markets supports risk appetite

Asian stock markets recorded a strong recovery led by semiconductor and technology stocks after three consecutive days of losses. The MSCI Asia Pacific Index rose by 2.2%, while gains in South Korea's Kospi and Taiwan's Taiex indices approached 4%.

Japan's Nikkei 225 index rose by 2.7% after entering correction territory on Friday. Technology stocks in mainland China gained nearly 7% as state-backed institutions intervened to support the market.

U.S. Nasdaq 100 futures also increased by 1% following a rise in semiconductor stocks on Wall Street. In contrast, European markets are expected to open slightly lower as investors focus on busy corporate earnings reports.

Diplomatic efforts to reduce tensions in the Middle East led to a pullback in oil prices. Following Iran's announcement that it is considering proposals from mediators, Brent crude fell by 0.7% to $88.58 per barrel. Reports suggesting a potential 10-day ceasefire in conflicts also contributed to an improvement in overall risk sentiment.

Bitcoin may be undervalued based on historical data

CryptoQuant analyst Darkfost noted that the MVRV indicator, which compares Bitcoin's market value to its realized value, has dropped to approximately 5% in its historical percentile ranking.

Unlike the traditional MVRV indicator, this measurement reveals the current value's position in past market cycles. The 5% level means that Bitcoin has had higher MVRV values in about 95% of its trading history.

According to Darkfost, the current outlook indicates that Bitcoin is significantly undervalued compared to its historical performance. While similar levels have coincided with long-term bottom regions in previous periods, it is emphasized that the indicator alone does not guarantee a short-term rise.

High-value transfers from whales to Cumberland and Binance

OnchainLens shared on-chain data showing that some large investors, who had been inactive for a long time, have started moving their Bitcoin and Ethereum assets again.

A whale that has been accumulating Bitcoin for nearly six years transferred 2,000 BTC, worth a total of $130.5 million, to different addresses. Of this transfer, 800 BTC, valued at approximately $52.2 million, was sent to Cumberland, which provides over-the-counter trading services to institutional investors. The remaining 1,200 BTC was transferred to a newly created wallet.

Since November 2013, another veteran investor who has been accumulating Bitcoin and gradually reducing their holdings over the past year sent 1,000 BTC to Binance after nearly four months of silence. The transfer, valued at approximately $65.56 million, was interpreted as a potential preparation for a sale in the market.

On the Ethereum side, an address that has not made any transactions for 11 months transferred 9,000 ETH worth $17.19 million to a Cumberland wallet. It was reported that the same address had previously sent a total of 50,000 ETH to FalconX in 13 transactions, with those assets valued at approximately $205.67 million at the time of the transfers.

While transfers to exchanges or institutional trading platforms increase the likelihood of sales, it does not necessarily mean that the assets will be sold in the open market. Institutions like Cumberland and FalconX also facilitate large transactions to be conducted over-the-counter without directly impacting market prices.

Bitcoin ETFs See $226.8 Million Inflow
According to data from Farside Investors, spot Bitcoin ETFs traded in the U.S. recorded a total net inflow of $226.8 million on July 20, extending the funds' positive streak to the fifth trading day.

BlackRock's IBIT fund led daily inflows with $116.5 million. Ark Invest's ARKB fund saw an inflow of $72.7 million, Grayscale Bitcoin Mini Trust received $41.4 million, and Fidelity's FBTC fund had an inflow of $24.1 million.

Bitwise's BITB fund saw a net inflow of $8.8 million, Morgan Stanley's MSBT product had $6.9 million, and VanEck's HODL fund recorded a net inflow of $1.8 million. In contrast, Grayscale's GBTC fund experienced an outflow of $45.4 million.

Spot Ethereum ETFs also recorded a total net inflow of $38 million on the same day. BlackRock's ETHA fund accounted for the majority of the inflows with $34.3 million, while FETH received $2.8 million and TETH saw $900,000.

Derivative Investors Approach the Rise with Caution
Despite the rise in Bitcoin prices, there has not been an overly optimistic positioning in the derivatives markets. The annualized funding rate for perpetual futures contracts remained at 8% on July 20. Rates above 12%, indicating excessive leveraged bullish expectations, have not been seen since July 10.

The 30-day option delta skew for Bitcoin was measured at 13%. This indicates that put options, which provide protection against price declines, are trading at a higher premium than call options that are bullish.

Although the benchmark has decreased from the 19% level recorded a week ago, it indicates that large investors continue to seek protection against downside risks.

Strategy's Cash Reserves Rise to $3.22 Billion
Strategy raised $263 million in cash through a common stock sale last week, increasing its total cash reserves to $3.22 billion.

There were concerns that the company might sell Bitcoin to meet its annual $1.76 billion preferred stock dividend and to pay off a total of $2.6 billion in convertible bonds maturing in 2028 and 2029. The increase in cash reserves is seen as potentially reducing the likelihood of Bitcoin sales in the short term.

However, macroeconomic risks persist. The yield on U.S. five-year Treasury bonds rose from 4.22% two weeks ago to 4.33%. The Trump administration's preparation to impose a new 50% tariff on certain Canadian products has also increased uncertainties regarding global trade.

Gold has risen by 1% to approximately $4,050 per ounce due to continued demand for safe havens despite the recovery in stock prices.

If Bitcoin maintains its position above $65,000 and ETF inflows continue, the $70,000 level may come back into focus. However, whale transfers, demand for hedging in the options market, high bond yields, and geopolitical risks stemming from the Middle East indicate that price movements may remain volatile in the short term.