Demand for Bitcoin from large investors and long-term holders is increasing, but a significant price rally has not occurred due to the slowing growth in USDT’s market capitalization, as per CryptoQuant's recent report.

"Stablecoin liquidity has yet to recover its growth trajectory to support a price rally," stated CryptoQuant. "The market cap growth of Tether’s USDT, a proxy for fresh liquidity in crypto markets, is now at its slowest pace since February 11."

The report highlights a 4.4% monthly growth rate in demand for Bitcoin from whales and long-term holders, the fastest since April. Over the past 30 days, these holders have accumulated 70,000 BTC, the most significant increase since April, mirroring the pre-rally phase of 2020 when large investors injected around $1 billion into Bitcoin.

Despite low price volatility, on-chain activity remains strong, indicating institutional investors are actively purchasing Bitcoin for their custody wallets. Additionally, long-term holders have resumed accumulation.

Selling pressure on Bitcoin has decreased, with traders having largely completed profit-taking. Unrealized profits have dropped to 3% from 69% in early March, suggesting reduced selling pressure ahead.

Ethereum (ETH) has also seen increased demand, especially following the approval of spot Ethereum ETFs in the US, with permanent holders purchasing an average of 40,000 ETH daily since May 20.

Despite these positive signs of increased institutional buying and spot ETF launches, the report suggests the sluggish growth in stablecoin liquidity may hinder a major Bitcoin price rally in the short term.

Bitcoin’s price remains stagnant despite strong inflows into US spot Bitcoin ETFs. The report notes an increase in Bitcoin acquisitions by US spot Bitcoin ETFs, with holdings rising from 819,000 to 859,000 between May 1 and June 6.

On June 7, US spot Bitcoin funds recorded a net inflow of $131 million, marking 19 consecutive days of inflows, according to Farside.

Historically, strong Bitcoin ETF inflows have led to price rallies, but recent movements suggest ETF flows alone do not determine Bitcoin’s price actions. According to CoinGecko, Bitcoin's price dropped from around $72,000 to $69,000 following jobs and unemployment data.

As of now, Bitcoin is trading at around $69,200, slightly down in the past 24 hours and about 6% below its all-time high set in March.