TL;DR
- Correction Phase Nearing Conclusion: After reaching an all-time high of $73,666 in March, Bitcoin underwent a correction phase.
- ETF Resurgence and Institutional Interest: Bitcoin exchange-traded funds (ETFs) have seen renewed demand over the past two weeks. Net inflows of $136 million per day now surpass the $32 million daily sell pressure.
- Solana’s DeFi Growth and Positive Crypto Developments: Solana’s decentralized finance (DeFi) ecosystem is thriving, with a Total Value Locked (TVL) of $4.78 billion and significant NFT trading volumes.
Following its remarkable surge to an unprecedented peak of $73,666 in March, Bitcoin encountered a phase of price correction and consolidation. During this time, Long-Term Holders (LTHs) decided to sell significant portions of their BTC, resulting in a surge in supply. Nevertheless, recent advancements indicate that this correction phase might be nearing its conclusion.
Over the last two weeks, Bitcoin exchange-traded funds (ETFs) have witnessed a resurgence in demand. Net inflows of $136 million per day now exceed the $32 million daily sell pressure from miners post-halving by more than four times. This shift indicates growing interest from institutional investors.
Bitcoin Accumulation Addresses and Falling Exchange Reserves
Exchange reserves of Bitcoin have been declining, while new accumulation addresses have been on the rise over the past month. It’s worth mentioning that long-term holders (LTHs), who had previously sold off a considerable portion of their Bitcoin holdings when the market was at its highest, are now starting to buy back Bitcoin again.
This is the first time they have done so since December 2023. This shift in behavior clearly indicates a strong positive sentiment among long-term holders.
Solana’s DeFi Ecosystem
Solana’s decentralized finance (DeFi) ecosystem is experiencing rapid growth. With a Total Value Locked (TVL) of $4.78 billion and NFT 24-hour trading volumes reaching $1.8 million, Solana is making significant strides. Its advantages in terms of transactions per second throughput and scalability position it favorably compared to other blockchains.
Macro Economy and Consumer Confidence
In the broader economy, there are differing views on US consumer confidence. The Conference Board surprised everyone with news of a rise, but the University of Michigan’s sentiment index painted a different picture with a significant drop.
The first quarter GDP growth fell short of expectations, settling at a revised rate of 1.3 percent. This decline can be attributed to decreased consumer spending and a decrease in inflation.
Interest Rates and Fiscal Support
Consumer spending is being affected by high interest rates and decreased fiscal support. Although the April PCE price index has leveled off, personal saving rates continue to be low. It is expected that the Federal Reserve will contemplate implementing rate cuts later this year.
Positive Developments in Crypto News
Last week brought several positive developments in the crypto space:
- Tether committed up to $150 million to Bitcoin miner Bitdeer, strengthening its position in the mining sector.
- NYSE will launch cash-settled Bitcoin index options, enhancing digital asset offerings and risk management tools.
- Franklin Templeton, VanEck, and Invesco Galaxy are in the process of readying the launch of spot Ether ETFs, subject to the approval of the SEC.
BlackRock’s iBIT has emerged as the dominant Bitcoin ETF, outpacing GBTC in terms of size. Its impressive trading volumes and competitive fees have made it a magnet for institutional investors.
Bitcoin experienced a dip to $69,200 early on Tuesday, indicating a sell-off for profits following its short-lived surpassing of the $70,000 mark. Despite this, the sentiment around Bitcoin’s continued growth remains “stubbornly bullish.” On-chain analysis indicates strong long-term conviction, potentially leading to further price gains.
Altcoin Movement
Ether (ETH) and dogecoin (DOGE) experienced minor declines, whereas Cardano’s ADA and Solana’s SOL witnessed gains of up to 3%. Among tokens with a valuation exceeding $1 billion, floki (FLOKI) and synthetic dollar project Ethena’s ENA tokens surged by over 10%.
In summary, Bitcoin’s correction phase may be nearing its end, with long-term holders reaccumulating. Solana’s growth and positive developments in the crypto space add to the overall bullish sentiment. However, investors should remain vigilant as the market evolves.
