Fed Pumping Profits? 90%+ Bitcoin Holders Still in the Green as Monetary Policy Fuels Crypto Rally

Bitcoin's bull run defies gravity—again. With over 90% of holders sitting on profits, the Fed's liquidity spigot appears to be turbocharging crypto's latest surge.

Wall Street's favorite inflation hedge keeps winning

While traditional markets wobble under rate hikes, BTC's hodlers are laughing all the way to the (decentralized) bank. The Fed's balance sheet expansion—sorry, 'quantitative easing'—coincides suspiciously with crypto's renewed momentum.

Warning signs or rocket fuel?

Some see froth when retail investors pile into BTC at near-all-time highs. Others note institutional inflows hitting record volumes. Either way, the 'digital gold' narrative gains steam while fiat printers go brrr—because nothing says 'sound money' like central banks creating $8 trillion out of thin air.

Key takeaways

Bitcoin’s dip to $113K triggered a massive $7.6B volume spike on Binance, indicating buyers. With Fed liquidity rising to $6.17T, market conditions point toward a potential breakout.

Bitcoin’s [BTC] swift pullback to $113K may have rattled nerves, but the surge in spot buying tells a different story.

Binance alone recorded a staggering $7.6 billion in volume during the drop — evidence of strong hands stepping in.

Despite the dip, over 90% of Bitcoin’s supply remains in profit, and with Federal Reserve liquidity expanding to $6.17 trillion, the macro backdrop is increasingly supportive.

Whale buys or panic sells?

The $7.6 billion in BTC spot volume recorded on Binance on the 1st of August is interesting.

Even as prices dropped from above $118K to nearly $113K, the sheer scale of trading suggests it wasn’t just panic selling; there may have been some serious buying behind the scenes.

Source: CryptoQuant

We’ve seen this before, like during the 22nd of June spike, which marked a local bottom.

Source: CryptoQuant

At the time of writing, Bitcoin held steady at around $113.5K, with volume easing off. That drop in activity could point to cooling volatility, and the worst might already be behind us.

Fed liquidity jumps adds to the fire

Alongside Bitcoin’s bounce, the U.S. Federal Reserve’s net liquidity ROSE to $6.17 trillion, its highest level in months.

This increase means more cash is circulating in the system, which often boosts demand for risk assets like crypto.

Source: CryptoQuant

Similar liquidity spikes in late 2023 and early 2024 coincided with bullish runs. This fresh rise could support Bitcoin’s next leg up, especially with market sentiment already turning.

Combined with the Binance volume surge, the liquidity boost provides a favorable setup, not just for recovery, but possibly for another breakout.

Over 90% still in profit, and that’s a big deal

Despite the pullback, Bitcoin’s fundamentals remain strong.

Source: CryptoQuant

At press time, 91.6% of BTC supply is still in profit. Historically, this metric staying above 90% has coincided with price consolidation before major upside moves.

It suggests that the recent dip hasn’t shaken investor conviction, and with spot volumes and liquidity support also in play.

BTC might be closer to a rebound than a further slide.