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bitcoin It’s been a big jump this month — but probably not for the reasons you might think.

The world’s largest digital currency has rallied more than 12 percent since early June. On Wednesday, its price topped $30,000, reaching its highest level since April 14, according to Coin Metrics.

Market participants attributed the gains to news that U.S. asset management giant BlackRock has applied to set up a spot bitcoin exchange-traded fund that tracks the market price of the underlying asset.

While that may be part of the reason, this massive movement can be attributed to another factor besides the news flow about large institutions taking steps to embrace Bitcoin or other digital assets.

Liquidity is thin, participants are huge

Bitcoin’s market depth within 1% of its mid-price range has fallen about 20% since the start of the year, according to data firm Kaiko.

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“Bitcoin’s recent surge in value has largely been driven by large transactions in less liquid markets,” Jamie Sly, head of research at CCData, told CNBC via email.

“Our analysis of market orders over 5 BTC shows a sharp increase in market buying, suggesting that large players are looking to gain exposure to digital assets.”

“When large orders are combined with thin books, markets are subject to greater volatility,” Sly added.

Part of the lack of liquidity is due to regulatory scrutiny of the crypto industry by U.S. authorities. The SEC has sued major exchanges such as Coinbase and Binance.

Low liquidity has been a feature of the cryptocurrency market throughout the year and is part of the reason bitcoin is up 80 percent so far this year.

retail traders are not back yet

Another notable feature of the current cryptocurrency market is the low trading volume on exchanges.

According to crypto data site CoinGecko, the daily trading volume of cryptocurrencies is currently around $24 billion.

That’s a marked drop from the more than $100 billion in total bitcoin trading volume during the peak of the cryptocurrency rally in 2021, when bitcoin rallied to an all-time high near $69,000.

Large cryptocurrency investors typically hope that an early surge in prices will be enough to lure retail investors back into the rally, ultimately pushing up the price of bitcoin and other digital currencies. But that didn’t happen.

Clara Medalie, director of research, said: “What’s notable about this rebound is that headline trade volumes are at multi-year lows, and we’ve only seen modest increases, and even then, well below our 1 levels seen from March to March,” Kaiko told CNBC.

“I think trading volume and price volatility are two of the most convincing indicators of market activity in cryptocurrencies. Both volatility and trading volume are at multi-year lows, and even rapid price increases are not enough to attract traders to participate.”

“This is not a market for the average customer”

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“Both bitcoin and ether are manipulated in this way by professional traders. They don’t trade most of the time and wait until there is some good news,” Alexander said.

“Then they’ll sell at the top and the market will go sideways.”

In fact, Bitcoin has been trading in a range this year, and attempts to move higher have been thwarted.

Alexander believes bitcoin could trade between $25,000 and $30,000 for the rest of the summer.

However, she expects the cryptocurrency to climb to $50,000 by the end of the year, citing large-scale actions by larger market players trying to shore up the market with heavy buying.

“This is not a market for the average customer. It really isn’t,” she warned.

Has the market bottomed out?

Can Ethereum Replace Bitcoin as the King of Crypto?

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