Large investments from large holders and institutional investors supported prices, contributing to the overall market recovery. The CryptoQuant report highlights this surge as a key factor behind the sustained price growth in the cryptocurrency market.
The report discusses several key factors driving demand for Bitcoin. First, there was a faster growth in the total amount of funds of regular holders and large investors. Over the past 30 days, regular Bitcoin holders have amassed 70,000 Bitcoins, the biggest increase since late April.
According to analysts at CryptoQuant, daily inflows from new major Bitcoin investors have reached $1 billion, matching the period of massive accumulation seen in 2020 ahead of Bitcoin’s rally from $10,000 to $70,000.
Additionally, the US has seen an increase in Bitcoin purchases from spot ETFs, with total holdings rising from 819,000 on May 1 to 859,000 currently.
CryptoQuant said these purchases have been a significant source of demand this year. Moreover, selling pressure from traders has subsided and the unrealized profit ratio has dropped to 0%. This indicates that active selling by traders has been exhausted.
A report from the data analytics company shows that demand for Ethereum has also increased since May 20, following the approval of spot ETH ETFs in the US. Daily ETH purchases from regular holders averaged 40,000 ETH after the ETF was approved, compared to 5,000 ETH before the announcement.
The total holdings of large ETH investors also increased, reaching 16 million ETH, up from 15.4 million before ETF approval and 14.9 million at the start of 2024, the report said.
The report concluded that despite positive trends for Bitcoin and Ethereum, stablecoin liquidity has yet to regain its growth trajectory, which is important to support the broader price rally.
CryptoQuant warns that growth in the market capitalization of USDT Tether, the guarantor of fresh liquidity in cryptocurrency markets, continues to slow and is now growing at its slowest pace since February 11th.