Consolidation phase over? Crypto Market Is Ready To Move North (Bitfinex)

Bitfinex analysts have identified on-chain dynamics that suggest the crypto market’s correction phase is over and investors have entered a re-accumulation phase, which precedes the rallies.

According to the latest Bitfinex Alpha report, crypto investors are buying bitcoin (BTC) and ether (ETH) at an increasingly steady pace. The market shift from consolidation to re-accumulation is evident in the behavior of BTC exchange-traded funds (ETFs) and the average transaction size in Bitcoin and Ethereum.

The consolidation phase is over

After bitcoin’s recovery to its all-time high of $73,700 in mid-March, long-term holders began selling their holdings to take profits. These moves led to an increase in the supply of BTC on the open market and a period of price correction that saw the cryptocurrency drop to $57,500.

During the consolidation period, which lasted several weeks starting in April, Bitcoin ETFs witnessed huge outflows of $148 million per day on average. Analysts said the exits marked a form of microcapitulation period; however, they were soon reversed.

With BTC sellers sold out, buying has increased. Local US Bitcoin ETFs have witnessed a resurgence in buying demand, with daily net inflows averaging $136 million over the past two weeks. Despite Grayscale’s GBTC seeing substantial outflows, the funds have been on a 15-day inflow streak, buying more than four times the daily supply of Bitcoin miners.

BTC exchange reserves fall

The pivot of crypto investors to new hoarding is also seen in the increase in new hoarding addresses and the average transaction size of Bitcoin and Ethereum.

“Examining the stack addresses on both the Bitcoin and Ethereum networks, we see that despite recently stable prices and modest growth in both assets, compared to previous months, there has been a notable increase in new addresses ‘accumulation over the last month’, Bitfinex. said

Analysts at the exchange explained that the trend indicates that investor sentiment remains bullish despite the stability of crypto asset prices. In addition, the estimated stability of the leverage ratio in these networks highlights a balanced market with minimal extreme risks.

Meanwhile, there has been a decrease in the Bitcoin exchange reserve, which tracks the amount of BTC held in exchange wallets. Crypto analysts consider a fall in this bullish metric as it reduces the available supply of BTC, while a rise indicates that more of the asset is available for sale. The decline began in February and has intensified recently as investors wait for another rebound in prices.

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