Is the Consolidation Phase Over? Crypto Market Set to Surge (Bitfinex)

Azeez Mustapha


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The transition from market consolidation to re-accumulation is clear from the behavior of Bitcoin ETFs and the significant drop in exchange reserves.

Bitfinex analysts have observed on-chain dynamics indicating that the crypto market’s correction phase has concluded, and investors have entered a re-accumulation phase, typically preceding rallies.The latest Bitfinex Alpha report shows that crypto investors are purchasing Bitcoin (BTC) and Ether (ETH) with growing consistency.

This market shift from consolidation to re-accumulation is apparent in the behavior of BTC exchange-traded funds (ETFs) and the average transaction size on both Bitcoin and Ethereum.

End of the Consolidation Phase
After Bitcoin’s rally to its all-time high of $73,700 in mid-March, long-term holders began selling to realize profits. This increased the BTC supply on the open market and led to a price correction, dropping the cryptocurrency to as low as $57,500.

During the consolidation period, lasting several weeks from April, Bitcoin ETFs experienced significant outflows, averaging $148 million per day. Analysts described this as a micro-capitulation period, which eventually reversed.

As BTC sellers became exhausted, buying activity increased. U.S. spot Bitcoin ETFs have seen a resurgence in buy-side demand, with daily net inflows averaging $136 million over the past two weeks.
Despite substantial outflows from Grayscale’s GBTC, these funds have been on a 15-day inflow streak, purchasing more than four times the daily supply produced by Bitcoin miners.

Bitcoin Exchange Reserves Plummet
Crypto investors’ shift towards re-accumulation is evident in the rise of new accumulation addresses and the increase in average transaction sizes for Bitcoin and Ethereum.

Analysts from the exchange note that this trend suggests a bullish investor sentiment despite stable crypto asset prices. Furthermore, the stability of the estimated leverage ratio on these networks indicates a balanced market with minimal extreme risks.

Additionally, there has been a decrease in the Bitcoin exchange reserve, which tracks the amount of BTC held in exchange wallets.

Crypto analysts view a decline in this metric as bullish because it reduces the available supply of BTC, whereas an increase would indicate more of the asset is available for sale. This decline, which started in February, has recently intensified as investors anticipate another price rally.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.

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