Bitcoin has once again brushed against its all-time high, hovering just below the record $73,000 mark. In the wake of this milestone, a significant shift in market behavior is emerging: long-term investors are reaccumulating BTC for the first time since December 2023. Simultaneously, the historic U.S. approval of spot Ethereum ETFs has ignited a powerful rally, propelling ETH prices up by over 20%. These developments signal renewed institutional interest and growing maturity in the digital asset ecosystem.
Market Resilience After Record Peaks
Despite sideways price action since March, both Bitcoin and Ethereum have demonstrated strong underlying resilience following their recent all-time highs. The approval of spot Ethereum ETFs by the U.S. Securities and Exchange Commission (SEC) came as a market surprise—fueling immediate bullish momentum and reinforcing confidence in regulatory progress.
This event not only boosted Ethereum’s price but also reignited demand for spot Bitcoin ETFs. After four consecutive weeks of net outflows, Bitcoin ETFs turned positive again in late May, indicating a resurgence of institutional and retail appetite from traditional finance channels.
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Crucially, selling pressure from long-term holders has declined significantly. Investor behavior is shifting back toward accumulation, suggesting that the market may be consolidating ahead of its next major move—one likely driven by increased volatility and fresh capital inflows.
A Bull Market Built on Spot Demand
Following the FTX collapse, Bitcoin bottomed out with a drawdown of -20.3%, after which prices began a steady climb back toward new highs, reaching $71,000 on May 20. This recovery pattern closely mirrors the 2015–2017 bull cycle—an early-stage market phase with limited derivatives infrastructure.
However, today's environment is fundamentally different. The current uptrend appears to be primarily spot-driven, supported by massive inflows into U.S.-listed spot Bitcoin ETFs. Unlike past cycles fueled by leveraged speculation, this rally reflects real demand from institutional investors seeking regulated exposure.
Ethereum’s correction since the FTX fallout has been notably shallower than Bitcoin’s, highlighting growing market resilience and reduced downside volatility. While ETH has lagged behind BTC in performance over the past two years—reflected in a weakening ETH/BTC ratio—the approval of spot Ethereum ETFs could act as a catalyst for a meaningful reversal.
Performance Across Timeframes: Signs of Caution
Analyzing Bitcoin’s rolling returns across weekly, monthly, and quarterly horizons reveals sustained strength: +3.3%, +7.4%, and +25.6% respectively. However, when measuring how often all three timeframes exceed 20% gains within a 90-day window, the current market shows only five such days—far below the 18–26 seen in prior bull runs.
This suggests a more cautious investor base, possibly due to macroeconomic uncertainty or lessons learned from previous cycles. Still, the consistency of positive returns underscores underlying strength.
For Ethereum, the ETF approval triggered an immediate surge: for the first time since late 2021, all three performance metrics exceeded 20% simultaneously. This synchronized rally highlights the powerful impact of regulatory clarity and institutional adoption.
ETF Flows Signal Institutional Confidence
In early March, as Bitcoin broke above $73,000, long-term holders began selling en masse—flooding the market with supply and triggering a correction. By April, spot Bitcoin ETFs experienced net outflows, peaking at $148 million per day as prices dipped to around $57,500.
Yet this weakness was short-lived. In the second-to-last week of May, ETF inflows surged to $242 million daily—nearly eight times the daily sell pressure from miners post-halving (~$32M/day). This dramatic reversal underscores the growing influence of ETF-driven demand compared to structural factors like mining economics.
The data confirms: spot ETFs are now a dominant force in shaping Bitcoin’s price trajectory.
Entering the "Euphoric" Phase
The percentage of Bitcoin’s circulating supply in profit is a key behavioral indicator. Historically, when this metric crosses 90%, it signals the onset of the "pre-euphoric" phase—where long-term holders begin taking profits after enduring bear market losses.
With BTC surpassing new all-time highs, the market has entered the euphoric phase, where supply in profit oscillates around 90% for 6–12 months. Currently, 93.4% of Bitcoin’s supply is in profit, placing us roughly 2.5 months into this stage.
Another useful metric is the share of supply held at a loss within a 90-day rolling window—representing "local top buyers." The relatively shallow depth of recent corrections aligns with patterns seen in the 2015–2017 cycle, indicating that few investors bought at extreme peaks. This suggests rational buying behavior and strong market health.
Long-Term Holders Regain Control
Long-term holder behavior is critical during euphoric phases. Their MVRV (Market Value to Realized Value) ratio reflects unrealized profit levels. Historically, transitions between bear and bull markets occur when long-term MVRV exceeds 1.5 but remains below 3.5—a range that can last 12–24 months.
As prices climb, so does their incentive to sell. But after distributing over 519,000 BTC in March—peaking at levels not seen since previous bull markets—long-term holders have shifted back into accumulation mode.
Notably, about 20% of those outflows came from Grayscale’s GBTC trust. Now, after this period of profit-taking, long-term holders are adding approximately 12,000 BTC per month back into cold storage—a sign of renewed conviction.
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FAQ: Understanding the Current Crypto Landscape
Q: What does it mean when 93.4% of Bitcoin supply is in profit?
A: It indicates that nearly all existing BTC holders are sitting on unrealized gains. While this can precede profit-taking, historical patterns show such conditions often persist for months during bull markets without triggering major crashes.
Q: Why are spot ETFs so important for crypto?
A: Spot ETFs provide regulated, accessible exposure to Bitcoin and Ethereum without requiring direct custody. This lowers entry barriers for institutional investors and pension funds, driving sustainable capital inflows.
Q: How does the ETH/BTC ratio affect market sentiment?
A: A rising ratio suggests outperformance of Ethereum relative to Bitcoin—often tied to network upgrades or ecosystem growth. The recent ETF approval may finally reverse its two-year underperformance.
Q: Are we in a full bull market yet?
A: Yes—Bitcoin has made new all-time highs, ETF demand is accelerating, and long-term holders are reaccumulating. These are hallmark signs of an ongoing bull cycle, likely extending into 2025.
Q: Could another correction happen soon?
A: Corrections are normal in bull markets. However, shallow drawdowns and strong ETF inflows suggest any pullback would likely be short-lived and met with strong buying interest.
Q: What triggers the next leg up in price?
A: Increased institutional adoption via ETFs, potential rate cuts by central banks, and broader macro acceptance of crypto as an asset class could all fuel further upside.
The Road Ahead: Accumulation Meets Institutional Adoption
The confluence of long-term holder reaccumulation and surging ETF demand paints a compelling picture for the future of digital assets. Bitcoin’s price may be consolidating, but behind the scenes, structural shifts are strengthening its foundation.
With spot Ethereum ETFs now approved, both major blockchains stand on equal regulatory footing in the U.S.—a pivotal moment for decentralized finance and Web3 innovation.
As traditional finance increasingly integrates crypto through regulated products, the line between legacy markets and digital assets continues to blur.
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The current phase may feel quiet compared to explosive rallies of the past—but beneath the surface, a more mature, resilient market is forming. For informed investors, this is not the end of the cycle, but rather the foundation for its most sustainable chapter yet.
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