Research Summary
The report analyzes the performance of Bitcoin and Ethereum markets, highlighting the impact of the SEC’s approval of Ethereum Spot ETFs and the return of traditional finance demand for Bitcoin. It also discusses the spending patterns of long-term holders and the influence of ETFs on the market.
Key Takeaways
Bitcoin and Ethereum Market Performance
- Bitcoin’s Recovery: After a significant correction, Bitcoin has rebounded towards its all-time high (ATH), reaching $71k on May 20. The report suggests that the current uptrend may be largely spot-driven, supported by the launch and inflows into the US Spot ETFs.
- Ethereum’s Resilience: Ethereum has shown increasing market resilience with shallower corrections since the FTX lows. However, its recovery has been slower compared to Bitcoin. The approval of US Spot ETFs for Ethereum could stimulate strength in the ETH/BTC ratio.
Impact of ETFs
- ETF Buyer Comeback: Bitcoin ETF flows transitioned into a regime of net outflows throughout April but have since reversed sharply. Last week, the ETFs experienced a net inflow of $242M/day, suggesting a return to buy-side demand.
- Ethereum ETF Approval: The SEC’s approval of Ethereum Spot ETFs was unexpected and resulted in a 20% rally in the ETH price. This could be a catalyst for a more promising future for the ETH/BTC trading pair.
Long-Term Holder Spending Patterns
- Spending Pressure Cooling Off: Long-term holder spending pressure has significantly cooled off, with investors returning to accumulation patterns. This suggests that volatility is required to motivate the next wave.
- Diamond Hands in Charge: As prices appreciate, the sell-side pressure from Long-Term Holders grows. The report suggests that the current market is in the Euphoria phase, with 93.4% of supply held in profit at the time of writing.
Actionable Insights
- Monitor ETF Flows: The report suggests that ETF flows can be a significant indicator of market trends. Tracking these flows could provide insights into buy-side and sell-side pressures.
- Assess Long-Term Holder Behavior: Long-term holder spending patterns can significantly impact market trends. Understanding these patterns could provide valuable insights into potential market movements.
- Consider the Impact of Regulatory Decisions: The SEC’s approval of Ethereum Spot ETFs had a significant impact on the market. Keeping an eye on regulatory decisions could help anticipate major market shifts.
