Analysts Identify Surge in Bitcoin Demand from Large Investors
Market intelligence platform CryptoQuant analysts have observed a significant increase in demand for bitcoin (BTC) among large investors and long-term holders. This surge in demand could have various implications for the cryptocurrency industry. As per the fundamental laws of demand and supply, it is viewed as a positive sign for the market.
Bitcoin Demand Growth Seen
According to the latest weekly report from CryptoQuant, experts suggest that the accelerated growth in BTC demand is crucial for sustaining a price rally. This indicates that bitcoin may be on the brink of experiencing a notable price surge in the near future.
- CryptoQuant data shows a decline in selling pressure from BTC traders who have already taken their profits.
- Unrealized profit margins have dropped to around 3% from 69% in early March.
- Analysts anticipate reduced selling pressure from traders in the current market scenario.
Increasing Demand in Bitcoin Market
The rise in demand for BTC is evident with the increased flow of funds into the United States spot Bitcoin exchange-traded fund (ETF) market, according to CryptoQuant.
- ETFs have seen a continual inflow trend for the past 19 days, with significant amounts of money coming in.
- Total ETF holdings have grown from 819,000 to over 859,000 since May 1st.
Bitcoin whales, referring to large investors holding substantial amounts of BTC, have also been active in the market, adding over $1 billion to the network. These investors are currently showing a monthly demand growth rate of 4.4%, the fastest since mid-April.
The behavior of Bitcoin whales mirrors their activity in 2020 before the cryptocurrency’s price soared from $10,000 to $70,000. During that period, BTC remained around $10,000 for six months with significant on-chain activity, primarily involving over-the-counter transactions.
No Definite Rally Predicted Yet
Additionally, long-term BTC holders have accumulated over 70,000 bitcoins in the last month, marking the most substantial increase since late April. Historically, heightened demand from these market participants has correlated with upward price movements.
Interestingly, Ethereum (ETH) is also witnessing a similar surge in demand, especially after the U.S. Securities and Exchange Commission’s approval of spot Ethereum ETFs. Both BTC and ETH have seen a rise in daily purchases by long-term holders and an increase in total holdings of these investors.
Nevertheless, analysts at CryptoQuant have refrained from making conclusive statements about an impending price rally for either BTC or ETH due to the lack of growth in stablecoin liquidity. Typically, a surge in stablecoin liquidity signals upcoming market rallies.
Owen Patter is a distinguished crypto analyst, accomplished researcher, and skilled editor, leaving a notable imprint on the cryptocurrency landscape. As a proficient crypto analyst and researcher, Owen delves into the intricate realms of digital assets, offering insights that resonate with a diverse audience. His analytical acuity is harmoniously paired with adept editorial skills, allowing him to transform complex crypto information into easily comprehensible content. Owen’s contributions serve as a valuable guide for both seasoned enthusiasts and newcomers, aiding them in navigating the dynamic world of cryptocurrencies with well-researched perspectives. With a meticulous commitment to precision, he empowers informed decision-making in the ever-evolving crypto domain.
