Large investments from major shareholders and institutional investors have supported the prices of Bitcoin and Ethereum, leading to a broader market rally. The CryptoQuant report highlights this rally as a key driver of the steady rise in the cryptocurrency market.
Bitcoin price rise factors
The report discusses several key factors that have contributed to the rise in demand for Bitcoin.
First, there has been a faster growth in the total balances held by permanent holders and large investors. Over the past 30 days, permanent holders have accumulated 70,000 BTC, the largest increase since late April.
According to CryptoQuant analysts, daily inflows from major new Bitcoin investors have reached $1 billion, which is on par with the inflows during the massive accumulation period witnessed in 2020 before Bitcoin rose from $ 10,000 to $70,000.
Furthermore, there has been a surge in Bitcoin purchases from spot ETFs in the US, with total holdings rising from 819,000 on May 1 to 859,000 currently.
Selling pressures.. reassuring decline
CryptoQuant said that these purchases have been a significant source of demand this year. Moreover, selling pressure from traders has subsided, with the unrealized profit ratio reset to 0%. This indicates that the intense selling by traders has exhausted itself.
The data analytics firm’s report revealed that demand for Ethereum has also increased since May 20, after the approval of Ethereum ETFs in the United States. The average daily purchase of Ethereum by permanent Ethereum holders reached 40,000 ETH after the approval of the ETFs, compared to 5,000 ETH before the announcement.
The report notes that the total holdings of major Ethereum investors have also increased, reaching 16 million ETH, compared to 15.4 million before the ETF was approved and 14.9 million at the start of 2024.
The rise will need additional signals.
The report concluded that despite the positive trends for Bitcoin and Ethereum, stablecoin liquidity has yet to regain its growth trajectory, which is essential to support a broader price rally.
CryptoQuant warns that the market cap growth of the Tether USDT token, a proxy for new liquidity in cryptocurrency markets, continues to slow, and is now growing at its slowest pace since February 11.
