Bitcoin's recent rally was driven by 'huge accumulation'

Bitcoin (BTC)’s recent rally was driven by “huge accumulation” as investor appetite remains high despite five days of red trading over the past week, according to CryptoQuant research. That's what it means.

Just three days ago, Bitcoin was trading at around $65,500 at market close on Friday. However, sustained gains over the weekend pushed the price up to $72,500 before the US market opened on Monday.

“A huge accumulation”

CryptoQuant's analysis shows that this rise is due to a significant accumulation phase, which indicates that investors have strong confidence in Bitcoin's long-term prospects, leading investors to significantly increase their holdings. He says he is encouraging them.

One of the most notable indicators of accumulation lies in the record reserves of Bitcoin accumulation addresses. These addresses, held by long-term investors, have seen massive inflows of Bitcoin, reaching all-time highs. This action shows solid belief in Bitcoin's long-term value.

Additionally, CryptoQuant is showing signs of a change in long-term investor behavior and a weakening of its distribution pattern. This change signals a reluctance among long-term holders to sell Bitcoin, making supply even tighter and pushing prices higher.

Around $3 billion in new USDT issuance in the past week also played a key role in the recovery, as stablecoins are the main way people migrate from fiat to cryptocurrencies.

Research shows that there is a strong historical correlation between the introduction of the new USDT and the rise in Bitcoin prices. This correlation suggests that newly minted USDT typically acts as a liquidity booster, facilitating further trading and investment in Bitcoin.

Slowdown in selling pressure

Bitcoin has entered a correction phase over the past few weeks as holders began taking profits after the flagship cryptocurrency hit a new all-time high. The correction pushed prices to a local low of $60,000 before rebounding.

The analysis identified a turning point in the correction phase when investors realized a total gain of $2.7 billion, signaling an end to the drawdown. This change started the current price increase and laid a solid foundation for a natural price increase.

Further reinforcing the market's strength is the reduction in selling pressure. CryptoQuant noted that short-term holders, who previously contributed to the selling momentum during price corrections, are now pivoting away from realizing losses, allowing for market stability and growth.