Zinger Key Points
- Bitcoin fell $1,300 after U.S. employment report showed nonfarm payrolls increased by 272,000, exceeding expectations of 182,000.
- CryptoQuant reports new whale wallets are adding $1 billion in BTC daily, indicating strong institutional investment.
Bitcoin BTC/USD fell over $1,300 from $71,997 to $70,663 within minutes following the release of the latest U.S. employment report.
What Happened: The report indicated that non-farm payrolls increased by 272,000, surpassing the expected 182,000.
Additionally, the U.S. unemployment rate rose slightly to 4%, higher than the anticipated 3.9%, while average hourly earnings grew by 0.4%, above the forecasted 0.3%.
The data likely led traders to infer that rate cuts in September have become less likely, causing the market’s brief correction. Bitcoin has recovered to $71,400 at the time of writing.
Institutional Investors Drive Bitcoin Accumulation
According to CryptoQuant, new whale wallets on the Bitcoin network are adding around $1 billion in BTC daily.
This trend suggests significant institutional investment, with Bitcoin being transferred to custodial wallets.
Over the past 30 days, permanent holders have accumulated an additional 70,000 BTC, the largest increase since late April.
Additionally, Bitcoin demand from large investors is growing at a rate of 4.4% per month, indicating strong market support.
The demand recovery for Bitcoin is also evident from the increased purchases of Bitcoin from spot ETFs in the USA.
Holdings in these ETFs have grown from 819,000 BTC on May 1 to 859,000 BTC currently.
CryptoQuant noted, “The purchases of Bitcoin from ETFs have so far this year been a meaningful source of demand.”
Moreover, the selling pressure from traders has significantly decreased.
The unrealized profit ratio for traders has reset to 0%, suggesting that heavy selling has been exhausted.
This reduction in selling pressure enhances Bitcoin's market stability, reducing the likelihood of abrupt price drops.
Also Read: Ethereum ETF Demand May Be Muted Compared To Bitcoin ETFs, Analysts Say
Despite the positive trends in Bitcoin accumulation, stablecoin liquidity has not recovered its growth trajectory.
The market capitalization growth of Tether's USDT, a proxy for fresh liquidity in crypto markets, has decelerated.
This slowdown in stablecoin liquidity growth could potentially hinder a sustained price rally in the short term.
What’s Next: These insights into Bitcoin’s market dynamics and institutional involvement will be key topics at the upcoming Benzinga Future of Digital Assets event on Nov. 19.
Industry leaders will discuss the evolving landscape of digital asset investments, the role of institutional investors, and the impact of regulatory developments on market trends.
Image: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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