The demand for Bitcoin from large investors and long-term holders is increasing, but the major price rally has not yet occurred due to the slowing growth of USDT’s market capitalization, CryptoQuant’s recent report reveals. Stablecoin liquidity, which is crucial for supporting a price rally, has not fully recovered its growth trajectory. The market capitalization of Tether’s USDT, a key indicator of fresh liquidity in the crypto markets, is growing at the slowest pace since February 11.
Despite the sluggish growth in stablecoin liquidity, there is a noticeable uptick in demand for Bitcoin among whales and long-term holders. The monthly growth rate of demand from these groups is at 4.4%, the fastest increase since April. In the last 30 days, these Bitcoin holders have added 70,000 BTC to their holdings, marking the most substantial accumulation since April. This is reminiscent of the pre-rally phase in 2020 when large investors poured in approximately $1 billion into Bitcoin.
On-chain activity for Bitcoin remains strong, even as the price shows low volatility. Institutional investors are actively purchasing Bitcoin for their custody wallets, and long-term holders have resumed accumulation. Selling pressure on Bitcoin has also decreased as traders have largely completed profit-taking. With unrealized profits at a low of 3%, down from 69% in early March, the expectation is for reduced selling pressure in the future.
In contrast to Bitcoin, Ethereum has seen a surge in demand, particularly following the approval of spot Ethereum ETFs in the US. Daily purchases by permanent holders of Ethereum have averaged 40,000 ETH since May 20. Despite the positive signs of increased institutional buying and the launch of spot ETFs, the report suggests that the slow growth in stablecoin liquidity could impede a significant Bitcoin price rally in the near term.
The report also points out the notable increase in Bitcoin acquisitions from US spot Bitcoin ETFs, with total holdings rising from 819,000 to 859,000 between May 1 and June 6. On June 7, US spot Bitcoin funds recorded a net inflow of $131 million, marking 19 consecutive days of inflows. However, the recent price movements indicate that ETF flows are not the sole factor influencing Bitcoin’s price actions.
While historically strong Bitcoin ETF inflows have been accompanied by price rallies, CoinGecko’s data shows that Bitcoin’s price fell from around $72,000 to $69,000 following the release of the jobs report and unemployment data. At the current time, Bitcoin is trading at approximately $69,200, slightly down in the past 24 hours, and is around 6% away from its all-time high. Despite the challenges posed by the slow growth in stablecoin liquidity, the continued demand from large investors and long-term holders could potentially support a future price rally for Bitcoin.
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