Bitcoin’s latest rally driven by ‘huge accumulation’

Bitcoin’s (BTC) latest rally has been driven by “massive accumulation” as investor interest remains high despite five days of red trading in the past week, according to CryptoQuant research.

Just three days ago, Bitcoin was trading at around $65,500 when 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’

CryptoQuant’s analysis attributes the rally to a pronounced phase of accumulation, indicating strong confidence among investors in Bitcoin’s long-term prospects, prompting them to significantly increase their holdings.

One of the most striking indicators of accumulation comes from the record high reserves in Bitcoin accumulation addresses. These addresses, which long-term investors own, have witnessed significant Bitcoin inflows, which have reached an all-time high. This behavior indicates a solid belief in Bitcoin’s long-term value.

Furthermore, CryptoQuant is observing a shift in investor behavior over the long term, with distribution patterns showing signs of weakening. This change signals a growing reluctance among long-term holders to sell their Bitcoin, further tightening supply and driving up prices.

The issuance of around $3 billion in new USDT over the past week also played a crucial role in the recovery, as the stablecoin is the main way people move from fiat to crypto.

According to the research, there is a strong historical correlation between the introduction of new USDT and increases in the price of Bitcoin. This correlation suggests that newly issued USDT usually acts as a liquidity enhancer, facilitating further trading and investment in Bitcoin.

The selling pressure decreases

Bitcoin entered a correction phase in recent weeks as holders started making profits after the flagship crypto hit a new all-time high. The correction took the price to a local low of $60,000 before rising again.

According to the analysis, the turning point in the correction phase was identified when investors realized gains totaling $2.7 billion, indicating an end to the pullback. This shift heralded the current rally and laid a robust foundation for organic price appreciation.

A further strengthening of market power is the reduction of selling pressure. CryptoQuant noted that short-term holders, who previously contributed to the selling momentum during the price correction, have now turned away from realizing losses, allowing the market to stabilize and grow.