According to CryptoPotato, market intelligence platform CryptoQuant has reported a rise in demand for bitcoin (BTC) among large investors and permanent holders. This surge is considered a positive sign for the crypto industry, following the laws of demand and supply. The experts suggest that this growing demand is crucial for a sustainable price rally, indicating that BTC prices may soon see a significant increase.
CryptoQuant's report reveals that selling pressure from BTC traders has decreased as they have finished taking profits. Currently, unrealized profit margins are around 3%, a stark contrast to the 69% seen in early March. Analysts predict a continued decrease in selling pressure from traders. Meanwhile, demand for BTC is increasing, as evidenced by the recovery of inflows into the United States spot Bitcoin exchange-traded fund (ETF) market. These investment vehicles have seen a 19-day inflow streak since mid-May, with recent inflows amounting to hundreds of millions of dollars. The total holdings of these ETFs have grown from 819,000 on May 1st to over 859,000.
Bitcoin whales, or large-scale investors, are also contributing to the demand surge, having added over $1 billion to the network. This group of investors has seen a monthly demand growth rate of 4.4%, the fastest since mid-April. The current activity of Bitcoin whales mirrors their on-chain movement in 2020 before BTC surged from $10,000 to $70,000. At that time, BTC remained around $10,000 for six months with high on-chain activity, later identified as over-the-counter deals.
Permanent BTC holders have also increased their holdings by over 70,000 in the last 30 days, marking their largest increase since late April. This rise in demand often correlates with higher prices. Similarly, demand for ether (ETH) is growing at the same rate as BTC, particularly since the U.S. Securities and Exchange Commission approved the launch of spot Ethereum ETFs. The daily purchases of permanent holders and the growth in total holdings of ETH investors have significantly increased. However, CryptoQuant analysts have not yet confirmed a price rally for either BTC or ETH, as stablecoin liquidity has not yet regained its growth trajectory. A surge in stablecoin liquidity typically accompanies market rallies.