Despite some positive developments, the digital asset market is still missing a crucial element needed to sustain a price rally, as reported by the analytics firm CryptoQuant.
According to CryptoQuant, there is an increase in demand for Bitcoin (BTC) and Ethereum (ETH).
“In the last 30 days, permanent holders have added 70,000 Bitcoin to their portfolios. Large investors have increased their demand by 4.4% monthly. Moreover, large investors are injecting $1 billion daily into Bitcoin, reminiscent of the pre-rally activity seen in 2020…
Ethereum’s demand has also seen a rise. Following May 20th, ETH demand surged due to spot ETH ETF approvals in the USA. Daily purchases by permanent holders have climbed to 40,000 ETH, with large investors holding 16 million ETH.”
However, CryptoQuant points out that stablecoin liquidity needs to recover in order to support a sustained crypto rally.
“The growth in market capitalization of Tether’s USDT, which serves as a proxy for fresh liquidity in crypto markets, has been slowing down and is now growing at the slowest pace since February 11. Price rallies are typically accompanied by an acceleration in stablecoin liquidity growth.”
USDT remains the top stablecoin by market cap and aims to maintain a 1:1 peg to the US dollar.
At the time of writing, Bitcoin is trading at $70,812, showing a nearly 4% increase in the past seven days. ETH is trading at $3,809, up 1.5% in the past week.
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