Bitfinex Alpha | BTC Enters Accumulation Period

Bitfinex Alpha | BTC Enters Accumulation Period

After Bitcoin hit an all-time high of $73,666 in March, long-term holders (LTH) sold large amounts of BTC, increasing supply and sparking a period of price correction and consolidation. This correction phase now appears to be coming to an end.

Demand for Bitcoin ETFs has risen again over the past two weeks, recording $136 million in net inflows per day, more than four times the $32 million in daily selling pressure from miners following the halving.

In addition to that, Bitcoin exchange reserves have fallen and new accumulating addresses have risen over the past month. We also see that LTH, which sold off the majority of its holdings at the peak, is accumulating Bitcoin again for the first time since December 2023. This trend reflects long-term bullish sentiment among holders.

Solana’s DeFi ecosystem has also seen rapid growth, which is evident in its lending, liquidity staking, and perpetual markets. Solana boasts $4.78 billion in total value locked (TVL) and $1.8 million in 24-hour trading volume for NFTs. Additionally, Solana currently leads in stablecoin trading volume among all blockchains. This resurgence of Solana is attributed to its superiority over other blockchains in terms of transaction throughput per second and scalability. While both Solana and Ethereum continue to grow, Solana’s rise is noteworthy. While Solana is four places below Ethereum in TVL, it is now in second place in decentralized trading volume by chain as more users find the blockchain useful.

On the macro side, there were mixed views on US consumer confidence, with the Conference Board reporting a surprise increase while the University of Michigan’s confidence index plummeted, but first-quarter GDP growth was more telling, coming in at a revised lower-than-expected 1.3%, reflecting lower consumer spending and lower inflation.

High interest rates and tapering fiscal support are clearly slowing consumer spending, as evidenced by the stabilization of the PCE price index in April, but personal savings rates remain low, and a possible Fed rate cut is expected later this year.

There was a lot of positive development in cryptocurrency news last week, including Tether investing up to $150 million in Bitcoin miner BitDeer to expand its operations and strengthen its position in the mining sector. Coindesk Index is launching cash-settled Bitcoin index options, enhancing its digital asset offerings and risk management tools. Franklin Templeton, VanEck and Invesco Galaxy are also preparing to launch spot Ethereum ETFs, pending SEC approval.

In terms of ETFs, BlackRock’s iBIT has surpassed GBTC to become the largest Bitcoin ETF, attracting institutional investors with increased trading volumes and low fees.

Happy trading!

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