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Bitcoin’s recent momentum shows signs of weakening as new buyer activity declines, yet long-term holders reach a 15-year peak, signaling sustained confidence in BTC’s value proposition.
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Despite the slowdown in fresh capital inflows, Bitcoin dominance in the crypto market has surged to 65%, reflecting its resilience amid altcoin underperformance.
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According to ARK Invest, the market-value-to-realized-value (MVRV) ratio is hovering near its two-year moving average, marking a shift from the strong bullish trends observed earlier in 2024.
Bitcoin’s bullish momentum fades as new buyers decline, but long-term holders hit 15-year highs and BTC dominance climbs to 65%, says ARK Invest report.
Bitcoin’s On-Chain Momentum Weakens Amid Declining New Buyer Activity
Bitcoin’s on-chain data reveals a cautious market environment as the number of new buyers entering the ecosystem continues to decrease, according to ARK Invest’s latest analysis. The market-value-to-realized-value (MVRV) ratio, a key indicator of market sentiment, has settled near its two-year moving average, signaling a potential shift from the robust bullish momentum that characterized much of 2024. This slowdown in capital inflows suggests that while Bitcoin remains a dominant asset, short-term enthusiasm is waning, requiring sustained price increases to maintain positive momentum.
Long-Term Holders Reach a 15-Year High, Highlighting Growing Market Conviction
Contrasting the decline in new buyers, the number of long-term Bitcoin holders—those retaining BTC for at least 155 days—has surged to the highest level in 15 years. These addresses now control approximately 74% of the total Bitcoin supply, underscoring a deepening conviction in Bitcoin’s role as a reliable store of value. This accumulation trend reflects a strategic shift among investors prioritizing long-term stability over short-term gains, reinforcing Bitcoin’s foundational narrative amid fluctuating market dynamics.
Bitcoin Dominance Surges to 65% as Altcoins Underperform
Bitcoin’s market share within the broader cryptocurrency landscape has climbed to 65%, a level not seen since late 2020. This rise in dominance is largely attributed to the underperformance of altcoins, which have failed to sustain momentum in recent months. The increased BTC dominance suggests a flight to quality among investors, who are favoring Bitcoin’s established network and liquidity over riskier alternative tokens. This trend may influence portfolio allocations and market strategies moving forward, emphasizing Bitcoin’s primacy in the crypto ecosystem.
Macro-Economic Factors and Market Volatility Outlook
Beyond on-chain metrics, ARK Invest highlights macroeconomic developments that could impact Bitcoin’s trajectory. Inflation rates have consistently surprised to the downside, with the Consumer Price Index averaging 1.5% annually between February and May—significantly below expectations. This trend raises the possibility of imminent Federal Reserve interest rate cuts, which historically have supported risk assets like Bitcoin. However, with Bitcoin’s price volatility currently at historic lows, analysts from QCP Capital caution investors to “beware the quiet,” anticipating potential heightened volatility and market “fireworks” in the latter half of the year.
Strategic Implications for Bitcoin Investors
Given the current market conditions, investors should consider the dual signals of declining new buyer activity and rising long-term holder accumulation. The elevated BTC dominance and macroeconomic backdrop suggest Bitcoin remains a cornerstone asset, but short-term price movements may require careful monitoring. Maintaining a balanced approach that accounts for both on-chain data and broader economic indicators will be crucial for navigating the evolving crypto landscape.
Conclusion
Bitcoin’s recent market dynamics reflect a nuanced phase characterized by reduced new buyer enthusiasm but reinforced by strong long-term holder conviction and increasing market dominance. While the MVRV ratio points to a cooling momentum, Bitcoin’s foundational strength and favorable macroeconomic signals provide a resilient outlook. Investors are advised to stay informed and prepared for potential volatility, leveraging Bitcoin’s established position as a leading digital asset in an ever-changing financial environment.
