Despite some bullish developments, the digital asset market still lacks one key ingredient that’s critical to fueling a sustained price rally, according to the analytics firm CryptoQuant.
CryptoQuant notes that demand is up for Bitcoin (BTC) and Ethereum (ETH).
“Bitcoin demand growth in permanent holders added 70,000 Bitcoin in the last 30 days. Large investors’ demand is up 4.4% monthly. Additionally, large investors are injecting $1 billion daily into Bitcoin, resembling 2020’s pre-rally activity…
Ethereum’s demand has also increased. Post-May 20th, ETH demand spiked due to spot ETH ETF approvals in the USA. Daily purchases by permanent holders rose to 40,000 ETH, with large investors holding 16 million ETH.”
However, CryptoQuant notes that stablecoin liquidity needs to recover to fuel a sustained crypto rally.
“The growth in the market capitalization of Tether’s USDT, a proxy for fresh liquidity in crypto markets, has continued to decelerate and is now growing at the slowest pace since February 11. Price rallies are generally accompanied by an acceleration in stablecoin liquidity growth.”
USDT is the top stablecoin by market cap and aims to maintain a 1:1 peg to the US dollar.
Bitcoin is trading at $70,812 at time of writing and is up nearly 4% in the past seven days.
ETH is trading at $3,809 and is up 1.5% in the past week.
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Generated Image: Midjourney