Despite Bitcoin‘s recent 20% decline, long-term holders are steadfastly buying into the dip. According to CryptoQuant, these holders have been accumulating Bitcoin at rates unseen since April 2023. The cryptocurrency saw its price dip to the mid $50,000s earlier this month but has stabilized, buoyed by substantial liquidity inflows.
Bitcoin spot ETFs are also witnessing renewed interest, with inflows reaching levels not seen since early June, when Bitcoin traded near $70,000. In the past three days alone, ETF providers absorbed over $600 million, with Blackrock leading with over $200 million.
The recent decline in Bitcoin’s price appears to be driven by various sell pressures. Notably, the now-defunct exchange Mt. Gox has begun repaying investors affected by its decade-old hack, involving the loss of nearly 1 million Bitcoin. Additionally, the German government has been selling off a portion of its sizable Bitcoin holdings acquired from criminal activities, although it still retains approximately $1 billion worth.
Despite these challenges, Bitcoin has found support in the $55,000-$58,000 range, prompting investors to seize the opportunity to accumulate the asset at lower prices. Analysts remain optimistic, noting a shift in sentiment as ETF inflows rise and long-term holders increase their holdings significantly.
Historically, July has been a positive month for Bitcoin, averaging a 9% increase. With investors and analysts capitalizing on current discounted prices, Bitcoin may be poised for a recovery from its recent downturn.
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