The long-term Bitcoin holders, especially those with unspent transaction output (UTXO) portions older than 1 and 2 years, have returned to buying supply on the market, highlighting the development of a re-accumulation phase before another bull rally of the crypto.
It is worth noting how a similar condition had not been seen since December 2023, just before Bitcoin took off and went to attack its historical highs.
In the meantime, the ETFs of Wall Street continue to buy coins, contributing to the reduction of possible selling pressure, with the inflows marking the 15th consecutive day of positive outcome yesterday.
The bull are coming back more charged than ever.
Let’s see everything in detail below.
The long-term holders of Bitcoin are buying again: accumulation in progress
After Bitcoin marked a new all-time high at $73,777 on March 14, we witnessed a phase of correction and price consolidation that lasted approximately 45 days, driven by long-term holders who sold significant amounts of coins.
Now, however, it seems that the retracement is over and that the so-called “long term holders” (LTH) are back to buying, highlighting the beginning of a re-accumulation period, with on-chain conditions that have not been observed since December 2023.
In particular, we can see in the following chart provided by Crypto Quant, how the balance of all long-term holders has started to grow again in the month of May, justifying the rebound in Bitcoin prices from 56,500 dollars to above 71,000 dollars.
Generally, these entities with more years of coins behind them liquidate significant portions of BTC during bullish phases, only to reemerge at the peak of bearish phases with new purchases: this model has worked very well for the bull markets of 2017 and 2021. This trend reflects the long-term bullish sentiment among asset holders, motivated to accumulate as much as possible during market dips.
Going into more detail and zooming in, we can notice how the holders who hold portions of unspent transaction outputs (UTXO) between 1 and 2 years are reversing the trend that characterized the months of March and April, returning to purchase supply in the last few weeks.
This type of condition is more visible in holders of 1.5-2 years, with the beginning of the month of May marking the right moment to come back to the forefront after a phase of boring distribution.
In particular, in just one month they have repurchased about 350,000 coins sold in the previous three months.
Another fundamental parameter to consider in order to perform a momentum analysis is the amount of reserve coins held by centralized exchanges such as Binance, Coinbase, Kraken, Bitget, Okx, Bybit, etc.
As shown in the Coinglass chart, since February these kinds of reserves have decreased drastically, eliminating potential selling pressure and contributing to the rally that pushed Bitcoin above new all-time highs in mid-March.
The trend of declining reserves has intensified in recent days with investors who seem determined to push the cryptocurrency above new price levels, reducing the supply further, approaching a situation of “supply shock”.
To all this, the emergence of new accumulation addresses is added, which are buying Bitcoin (and also Ethereum) in anticipation of the next general price increase.
Let’s see in this regard how, despite the recent stable prices and modest growth for both assets, compared to previous months, there are significant increases in new accumulation addresses, supporting the thesis that we are in a pre-pump phase.
At this rate, the 100,000 dollars are no longer a mirage and could be reached by the end of 2024.
The Bitcoin spot ETFs continue to remove supply from the market thanks to positive inflows.
In addition to the data related to the behaviors of long-term holders and the data of exchange reserves, in order to provide a complete on-chain overview, we examine the latest results regarding the inflows of spot Bitcoin ETFs.
We carefully notice how the accumulation by the holders who supported the price rise of the currency in the month of May, was accompanied by inflows that were clearly positive for ETFs on Wall Street in the last two weeks, with data that exceeded 136 million dollars per day on average.
The net inflows have exceeded the production of new coins by the network’s miners by about 4 times, highlighting a deflationary situation where more coins are “burned” than are produced.
Note how the ETFs have recorded positive inflows for 15 consecutive days starting from May 13, when Bitcoin had just begun to recover from the dips at $61,400.
Very important in this regard is what happened last Friday, when despite the heavy outflow of GBTC with 124 million dollars sold, additional shares were purchased on the other side, bringing the net inflow to a positive state at 48.8 million dollars by the end of the day.
Now it seems as if the micro-capitulation phase that characterized the second half of March and the entire month of April has now faded to make way for an accumulation phase.
In total now the Bitcoin USA ETFs hold a Total Net Asset of 59.42 billion dollars.
It is worth noting that on May 29, the iShares Bitcoin Trust (iBIT) ETF by BlackRock surpassed the Bitcoin Trust (GBTC) by Grayscale in terms of Bitcoin holdings, with iBIT reaching 288,670 BTC held (AUM $19.6 billion), compared to GBTC’s 287,450 (AUM $19.26 billion)
iBIT has also recorded an average daily trading volume of 303.4 million dollars in the last month, surpassing the 291 million dollars of GBTC. This increase in trading volume reflects the growth of investors’ confidence in BlackRock’s ETF product
This type of competition between the top two regulated investment products in America on Bitcoin offers an advantage within the market with narrower bid-ask spread quotes, greater liquidity and higher trading volumes, reducing transaction costs and making trades more immediate, secure, and efficient than they have ever been.
The third ETF by AUM is that of Fidelity with 164,158 BTC on the balance sheet.
Now it will be interesting to observe the data of the Bitcoin spot ETFs in Australia, whose trading was opened for the first time today.
The worldwide public acceptance of Bitcoin as a financially recognized asset, with the expansion of new ETFs and new trading venues, will certainly lead to a phase of new adoption among institutional investors, with the price of the crypto likely to see new highs in the coming months.
