Investing.com – Large investments from majority holders and institutional investors have boosted Bitcoin and Ethereum prices, fueling a broader market recovery. A report from CryptoQuant highlights this increase as a key factor for the sustained price rally in the cryptocurrency market.
The report analyzes several key factors contributing to the increase in demand for Bitcoin. First, there has been faster growth in total balances held by permanent holders and large investors. In the last 30 days, permanent Bitcoin holders have accumulated 70,000 Bitcoins, marking the largest increase since the end of April.
According to CryptoQuant analysts, daily inflows from new large Bitcoin investors have reached 1 billion, paralleling the period of massive accumulation seen in 2020 before Bitcoin’s rally from $10,000 to $70,000.
Additionally, there has been an increase in Bitcoin purchases from spot ETFs in the US, with total holdings increasing from 819,000 on May 1 to 859,000 today. CryptoQuant noted that these purchases have been a major source of demand this year. On the other hand, selling pressure from traders has decreased, with the unrealized profit ratio restoring to 0%. This indicates that strong selling by traders has dried up.
The on-chain data analytics firm’s report reveals that demand for Ethereum has also increased since May 20, following the approval of ETH spot ETFs in the US. Daily ETH purchasing by of permanent holders has averaged 40,000 ETH following the ETF’s approval, compared to 5,000 ETH prior to the announcement.
The report suggests that the total holdings of large ETH investors have also increased, reaching 16 million ETH, compared to 15.4 million before the ETF’s approval and 14.9 million at the beginning of 2024.
The report concluded that despite 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 USDT market capitalization growth, an indicator of new liquidity in cryptocurrency markets, continues to slow, and is now growing at the slowest pace since February 11.
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