Bitcoin
Bitcoin Struggles to Recover as Tether’s USDT Growth Stalls: CryptoQuant
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Demand for Bitcoin from large investors and permanent holders is increasing. However, Bitcoin (BTC) has yet to see a major price recovery as USDT market capitalization growth is slowing down, according to CryptoQuant’s recent report.
“Stablecoin liquidity has not yet recovered its growth trajectory to support a price rally,” CryptoQuant stated. “Growth in Tether’s USDT market capitalization, a proxy for new liquidity in crypto markets, has continued to slow and is now growing at the slowest pace since February 11.”
As noted, demand for Bitcoin among large-scale investors, often called whales, and long-term holders is gaining speed. The monthly growth rate in demand from these groups is 4.4%, the fastest increase since April.
Over the past 30 days, these Bitcoin holders have added 70,000 BTC to their holdings, the most substantial accumulation since April. This mirrors the pre-rally phase of 2020, when large investors funneled around $1 billion into Bitcoin, according to the report.
Activity on the network remains robust despite Bitcoin’s price showing low volatility. Data suggests that institutional investors are actively purchasing Bitcoin for their custodial portfolios. Furthermore, long-term holders resumed accumulation.
The report also notes that selling pressure on Bitcoin has eased as traders have largely completed taking profits. With unrealized profits at a minimum of 3%, down from 69% at the beginning of March, the expectation is for a reduction in selling pressure in the future.
At the same time, Ethereum (ETH) witnessed a surge in demand, especially after the approval of Ethereum ETFs in cash in the US, with daily purchases by permanent holders averaging 40,000 ETH since May 20.
Despite optimistic signs of increased institutional purchases and the launch of spot ETFs, the CryptoQuant report suggests that the slow growth of stablecoin liquidity could harm prospects for a major recovery in Bitcoin prices in the near term.
Bitcoin Price Stalls Despite Strong Inflows into US Spot Bitcoin ETFs
The report also highlights a notable increase in Bitcoin purchases from US spot Bitcoin ETFs (ETFs), with total holdings increasing from 819,000 to 859,000 between May 1 and June 6.
On June 7, US Bitcoin spot funds recorded a net inflow of $131 million, marking 19 consecutive days of inflows, according to data from the Far side.
Historically, strong Bitcoin ETF inflows have been accompanied by Bitcoin price rallies. However, price movements over the past two weeks indicate that ETF flows are not the only factor influencing Bitcoin price actions.
CoinGecko’s data shows that the price of Bitcoin fell from around $72,000 to $69,000 on Friday following the jobs report and unemployment data.
At the moment, Bitcoin is trading around $69,200, a slight drop in the last 24 hours, and is about 6% away from its all-time high set in March.
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