Bitcoin has rallied sharply this month — but not for reasons you might think.

The world’s largest digital currency has risen more than 12% since the beginning of June. On Wednesday, its price topped $30,000 to hit its highest level since April 14, according to Coin Metrics data.

Market players have attributed the jump to the news that U.S. asset management giant BlackRock had filed for a spot bitcoin exchange-traded fund tracking the market price of the underlying asset.

While that may be part of the reason, the outsized moved can be put down to another factor beyond the news flow surrounding large institutions taking steps to embrace bitcoin or other digital assets.

Crypto “market depth” has been sitting at very low levels this year. Market depth refers to a market’s ability to absorb relatively large buy and sell orders. When market depth is low and big players put in orders to buy or sell digital coins, prices can move in a big way up or down, even if the orders are not that huge.

Market depth is a measure of liquidity in a market.

According to data firm Kaiko, bitcoin’s market depth has fallen 20% since the start of this year. Bitcoin has been one of the hardest-hit cryptocurrencies in terms of market depth, Kaiko said.

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

“Our analysis of market orders over 5 BTC reveals an aggressive surge in market buying, suggesting large players are seeking to gain exposure to digital assets.”

“When combining large orders with thin books, the market is subject to more volatile movements,” Sly added.

That lack of liquidity has in part been driven by the regulatory scrutiny of the crypto industry from U.S. authorities. The Securities and Exchange Commission has sued major exchanges such as Coinbase and Binance.

Low liquidity, which has been a feature of the crypto market all year, is also partly behind bitcoin’s 80% year-to-date rally.

Another notable feature of the current crypto market is the low volumes being traded on exchanges.

Daily trading volume in the cryptocurrency currently sits at around $24 billion, according to crypto data website CoinGecko.

That’s down markedly from the more than $100 billion of overall trading volume in bitcoin during the peak of the 2021 crypto rally, when bitcoin rose close to an all-time high of nearly $69,000.

Large crypto investors usually hope that an early surge in prices will be enough to tempt retail investors back into participating in the rally which ultimately boosts prices for bitcoin and other digital coins. But that hasn’t happened.

“What is notable about this rally is that trade volumes overall are at multi-year lows, and we are only seeing a slight increase, which even then is far lower than levels we saw from January to March,” Clara Medalie, director of research at Kaiko, told CNBC.

“I think trading volumes and price volatility are two of the most telling indicators of crypto market activity. Both volatility and volumes are at multi-year lows, and even a rapid increase in price is not enough to draw traders in.”

In the last bitcoin cycle, market momentum was largely driven by big, institutional names as investment banks from Morgan Stanley to Goldman Sachs set up trading desks to give their clients exposure to the digital currency.

However, the market really started to break out only when retail traders started to take notice — in early 2021, people became tempted by the phenomenon that was NFTs, or nonfungible tokens, and other more speculative bets.

Later that year, the cryptocurrency market experienced a seismic rally, with the price of bitcoin zooming to unprecedented levels. That was in tandem with surging trading volume, which climbed from $21.2 billion at the start of 2020 to $105.4 billion on Nov. 9, 2021, when bitcoin hits its all-time high, according to CoinGecko.

Today, trading volume is nowhere near where it was at the height of the 2021 crypto boom.

“Any bit of news, if it’s good, then the professional traders trade — otherwise, they’re not trading,” Carol Alexander, a professor of finance at the University of Sussex, told CNBC.

“If a bit of good news like the bitcoin ETF comes, they fire the cannons upwards.”

BlackRock’s ETF filing was followed by similar move from Invesco and WisdomTree, which also filed for their own respective bitcoin-related products.

“Bitcoin and ether are both being manipulated in this way by the professional traders. They don’t trade most of the time, they wait until there’s a bit of good news,” Alexander said.

“Then they’ll sell the top and you’ve got a sideways market.”

Indeed, bitcoin has traded within a range this year, and attempts to burst significantly higher have been thwarted.

Alexander thinks bitcoin is likely to trade within a range of between $25,000 and $30,000 for the remainder of the summer.

She expects, however, that toward the end of the year, the cryptocurrency will climb toward $50,000, citing attempts from larger market players to prop up the market, with big purchases making outsized moves.

“It’s not a market for ordinary clients. It’s really is not,” she warned.

Vijay Ayyar, vice president of international markets at the Indian crypto exchange CoinDCX, told CNBC he suspects the latest run-up in bitcoin’s price is being driven more by “long term institutional buyers.”

Big funds and crypto-focused hedge funds are among the market participants driving the action, Ayyar added.

“I don’t think this is as much of a retail push, since retail was quite flushed out during the recent pullback,” he said.

Several crypto industry insiders have expressed hopes that the market is nearing a “bottoming” period where it can start to rise again.

The recent price action echoes activity in 2018, when both bitcoin’s price and volumes were subdued for several months before beginning to rise again the following year.

However, CCData’s Sly said it is “still too early to say whether the worst is over for bitcoin.”

“The recent wave of interest from traditional financial institutions, like Blackrock, Citadel, and Fidelity instils a renewed optimism in the market,” he said.

“Provided the wider macro environment and equity markets continue to be favorable, it is possible that bitcoin could maintain its current positive price trajectory.”

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