Market intelligence platform CryptoQuant has observed a significant increase in demand for bitcoin (BTC) from large investors and long-term holders. This surge in demand is seen as a positive sign for the crypto industry, following the basic laws of supply and demand.
According to the latest CryptoQuant weekly report, experts believe that the growth in BTC demand is crucial for a sustainable price rally. As a result, BTC may soon experience a substantial price increase.
CryptoQuant’s analysis reveals that selling pressure from BTC traders has decreased as many have already taken profits. Currently, unrealized profit margins are around 3%, a significant drop from 69% in early March. This decrease in selling pressure, coupled with a rise in demand, is evident in the increasing inflows into the United States spot Bitcoin exchange-traded fund (ETF) market.
Bitcoin whales, or large investors, have also been active in the market, adding over $1 billion to the network. This group of investors is experiencing a monthly demand growth rate of 4.4%, the highest since mid-April. Their current activity mirrors the on-chain movement seen in 2020 before BTC’s price surged from $10,000 to $70,000.
Additionally, permanent BTC holders have accumulated over 70,000 BTC in the last 30 days, marking their largest increase since late April. This uptick in demand from long-term holders often correlates with higher prices.
Interestingly, demand for ether (ETH) is also on the rise, especially after the approval of spot Ethereum ETFs by the U.S. Securities and Exchange Commission. The daily purchases of permanent ETH holders and the growth in total holdings of ETH investors have increased significantly.
However, despite the positive indicators, CryptoQuant analysts are cautious about predicting a price rally for either BTC or ETH. They note that stablecoin liquidity, which usually accompanies market rallies, has not yet shown signs of significant growth.
In conclusion, the surge in demand for BTC and ETH from large investors and long-term holders is seen as a positive development for the crypto industry. However, the market remains cautious about predicting a price rally until stablecoin liquidity shows signs of recovery.