Bitcoin (BTC USD) Continues To Attract Institutional Liquidity

Bitcoin (BTC USD) demand notably slowed down in the last week of May, signaling a cooling down of the momentum observed in the previous week. But despite that, recent data revealed that demand from the large holder cohort remained strong.

A recent CryptoQuant analysis revealed that large holder activity was experiencing positive growth. This was based on an assessment of addresses holding between 1,000 and 10,000 BTC.

According to the assessment, the large holder activity was a sign of market confidence. In addition, recent market data confirmed that Bitcoin was experiencing weak sell pressure.

This was based on an assessment of short term holder and long term holder flows. Short term holders recently sent 8,000 BTC to exchanges compared to 12,000 BTC during the Yen carry trade unwind in August and 80,000 BTC during the tariffs induced crash.

In comparison, long term holders recently sent 86 BTC to exchanges compared to 254 BTC at its peak in January and 626 BTC during the 2024 peak. These findings confirmed that Bitcoin exchange inflows from the two categories were notably lower after its latest peak.

Despite the above findings, whale activity still contributed significantly to short term price action. Whale Alert highlighted the transfer of 1,083 BTC from a private wallet to Coinbase in the last 24 hours.

Higher sell pressure than demand saw BTC push below $107,000 at press time. Sustained bearish momentum could potentially push price for a support retest near the $103,000 price level.

New York’s Aggressive Push to Become a Pro-Bitcoin City

New York city major Eric Adams who is known to be pro crypto recently revealed plans to create a Bitcoin bond. This move will make New York the first city to launch a BTC bond.

But what does a Bitcoin bond mean? The move would encourage adoption at the municipal level, paving the way for more institutional exposure to the digital asset. An outcome that means more liquidity could be channeled into Bitcoin (BTC USD).

Mayor Adams also made a pledge to make it easier for crypto businesses to operate in New York. He revealed a plan to abolish the BitLicense regulatory framework which has been in place for a decade.

Although the framework was aimed at introducing consumer protection and proper regulation for crypto companies, it has had some drawbacks.

For example, the application cost was over $100,000 which was costly especially for startups. In addition, the compliance process was strict, making it difficult for crypto companies to succeed in penetrating the U.S market.

BitLicense is the latest of of regulatory frameworks to be rolled back in the U.S. The country previously overturned the IRS DeFi reporting rule which required DeFi platforms to record and report transaction data.

Growing Bitcoin (BTC USD) Adoption Among Nations

The Bitcoin adoption trend also expanded outside the U.S. Among the most notable developments in that include reports that Pakistan will be joining the Bitcoin race.

The country reportedly announced plans to create a Bitcoin (BTC USD) strategic reserve. This underscored the growing list of countries or states that are embracing BTC adoption.

Global corporations have also been joining the trend with BlackRock leading the charge. Crypto analyst Ash Crypto believes that these are signs of the ongoing rush for Bitcoin which could accelerate the cryptocurrency’s move towards the $1 million price tag.

In conclusion, Bitcoin has been experiencing relatively weak sell pressure considering that it recently surged to a new ATH. This underscored the prevailing bullish optimism backed by rising institutional and state demand for the asset.

The growing optimism suggests that more liquidity could potentially flow into BTC in the coming months. However, the findings were not necessarily indication that it will be smooth sailing ahead.  Analysts still anticipate volatile periods characterized by aggressive pullbacks along the way.

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