The cryptocurrency market is experiencing a significant rebound as major holders and institutional investors continue to make substantial investments in Bitcoin (BTC) and Ethereum (ETH), suggesting that the current price rally may have considerable room to grow. Data indicates that these heavyweight players are reinforcing the foundation for a potential continuation of the market’s upwards trajectory.
In the past 30 days, permanent Bitcoin holders have made their presence felt strongly, accumulating an additional 70,000 BTC. This is the steepest increase observed since late April, reflecting a robust confidence in the enduring value of Bitcoin. Complementing this trend, daily inflows from new large Bitcoin investors have peaked at $1 billion. This influx of capital mirrors the accumulation period witnessed in 2020, which preceded Bitcoin’s meteoric rise from a value of $10,000 to an all-time high of around $70,000.
The appetite for Bitcoin in the United States has also been evidenced by the swell in total holdings in spot Exchange Traded Funds (ETFs). From May 1st to the current date, holdings have expanded from 819,000 to 859,000, demonstrating a conspicuous demand surge for Bitcoin among investors.
Ethereum has similarly seen its demand spike, notably since May 20 following the approval of spot ETH ETFs in the US market. Post-approval, permanent holders of ETH have been purchasing on average 40,000 ETH daily. Large ETH investors have increased their holdings significantly, with their combined assets growing from 15.4 million ETH before the ETF approval to an estimated 16 million, a notable ascent from the 14.9 million held at the beginning of 2024.
Trader-induced selling pressure appears to be abating, with the unrealized profit ratio flattening at 0%. This change indicates that the intense selling pressure from traders has receded, allowing the market to find its footing.
However, not all indicators are positive. The liquidity of stablecoins, which is critical for a sustained upward movement in cryptocurrency prices, has not returned to its growth stance. A concerning signal is the slowing pace of USDT market capitalization growth, now at its lowest since February 11, as pointed out by market analysts at CryptoQuant. This could imply that fresh liquidity entering the crypto ecosystem is plateauing, potentially weighing on the broader market’s ability to maintain its recovery momentum.
Despite this, the increased activity from institutional investors and the accumulation of assets by long-term holders imply a solid belief in the future of Bitcoin and Ethereum. If stablecoin liquidity were to resume its ascent, it would likely offer additional support to the current trend, potentially leading to another significant price rally in the crypto market. Investors and market observers alike will be closely monitoring these developments in the weeks to come.
