Flagship cryptocurrency, Bitcoin has now reclaimed its trillion-dollar asset status it lost after the May 2021 crash, which was caused by China’s ban on cryptocurrencies and cryptocurrency mining activities.
Today, the price of Bitcoin traded as high as $55,172, breaking the critical resistance zone at $52,000, signaling a renewed bull run for the asset class.
Bitcoin’s renewed bull run seems to be as a result of significant demand for the asset class by Whales, a term used to describe big money investors in the cryptocurrency space.
On-chain data
The bullish momentum in the price of Bitcoin comes from a lot of on-chain analytics data that points to net accumulation of Bitcoin by whales. William Clemente, an on-chain analysts’ expert, explains that whales have been buying up Bitcoin since late July.
He uses a metric called entity flows and states, “comparing the behavior of different market participants separated into cohorts based on the size of their holdings. Whales have been buying since late July. Shrimp, crabs, fish, & octopus have been stacking harder than ever. The only cohort that has been on a decline is the 100-1K cohort, which has just recently started increasing their holdings as well.”
Asides from this, the latest report from on-chain analytics provider, Glassnode, reveals that Bitcoin’s price has rallied strongly out of a zone of heavy accumulation, seeing around $1.75 billion worth of capital inflows per day.
The report explains, “When prices consolidate in a range for an extended period, and a large volume of coins transact on-chain, this can be considered as zone of accumulation. As such we can consider this an established cost basis for many buyers.”
What else is happening
Asides from Bitcoin, we are seeing a significant rally in Ether, the second largest cryptocurrency. The token today traded as high as $3,622 and many analysts are calling for all-time highs in the coming weeks.
We are seeing renewed momentum from other altcoins like XRP, BNB, ADA and SOL which are all posting double-figure gains in the last 7 days.
We are also seeing a lot of interest from traditional financial institutions to offer cryptocurrency-related services. An example will be the U.S Bank, the fifth largest retail bank in the United States partnering with New York Digital Investment Group (NYDIG) to provide custody services for Bitcoin (BTC), Bitcoin Cash (BCH) and Litecoin (LTC).
This trend of institutional demand for the asset class and offering of crypto-related services is expected to continue especially now that Fed Chair Jerome Powell and SEC Chair Gary Gensler have both affirmed that they do not plan to ban cryptocurrencies in the U.S, setting the stage for more institutional adoption of cryptocurrency assets in the future.
Bottomline
Bitcoin now trades $54,950, with a market capitalization of approximately $1.04 trillion as of the time of this writing. The coin is now more valuable than legacy companies like Facebook, Tesla and Berkshire Hathaway. The token is now the 6th most valuable asset in the world according to Asset Dash.
