Bitcoin’s (BTC) latest rally was driven by “huge accumulation” as investor appetite remains high despite five days of trading in the red over the past week, according to CryptoQuant research.
Just three days ago, Bitcoin was trading at roughly $65,500 as markets closed on Friday. However, a sustained rally over the weekend took prices to $72,500 before US markets opened for trading on Monday.
‘Huge accumulation’
The analysis from CryptoQuant attributes the rally to a pronounced phase of accumulation, which indicates strong confidence among investors in Bitcoin’s long-term prospects, prompting them to increase their holdings significantly.
One of the most notable indicators of accumulation comes from the record-high reserves in Bitcoin accumulation addresses. These addresses, which long-term investors hold, have witnessed significant inflows of Bitcoin, reaching all-time highs. This behavior signals a solid conviction in the long-term value of Bitcoin.
Furthermore, CryptoQuant observes a shift in long-term investor behavior, with distribution patterns showing signs of weakening. This change indicates a growing reluctance among long-term holders to sell their Bitcoin, further tightening supply and pushing prices upward.
The issuance of roughly $3 billion new USDT over the past week also played a crucial role in the recovery as the stablecoin is the primary way people move from fiat to crypto.
According to the research, a strong historical correlation exists between the introduction of new USDT and increases in Bitcoin’s price. This correlation suggests that newly issued USDT usually acts as a liquidity booster, facilitating further trading and investment in Bitcoin.
Sell-pressure slowing
Bitcoin went into a correction phase over the past few weeks as holders began taking profit after the flagship crypto reached a new all-time high. The correction took the price to a local low of $60,000 before bouncing.
According to the analysis, the turning point in the correction phase was identified when investors realized profits totaling $2.7 billion, suggesting an end to the drawdown. This shift began the current rally and set a robust foundation for an organic price increase.
Further bolstering the market’s strength is the reduction in selling pressure. CryptoQuant noted that short-term holders, who previously contributed to the selling momentum during the price correction, have now pivoted away from realizing losses, allowing the market to stabilize and grow.
Bitcoin Market Data
At the time of press 10:58 pm UTC on Apr. 8, 2024, Bitcoin is ranked #1 by market cap and the price is up 3.7% over the past 24 hours. Bitcoin has a market capitalization of $1.41 trillion with a 24-hour trading volume of $37.23 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 10:58 pm UTC on Apr. 8, 2024, the total crypto market is valued at at $2.69 trillion with a 24-hour volume of $96.76 billion. Bitcoin dominance is currently at 52.41%. Learn more about the crypto market ›
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