"Bitcoin Rally Driven by Core Believers and Newcomer Surges: Glassnode Analysis"

# Complex Investor Dynamics Propel Bitcoin (BTC) and Ethereum (ETH) Rally, Says Glassnode Recent surges in Bitcoin (BTC) and Ethereum (ETH) prices have been attributed to the actions of differing investor groups, according to blockchain data analytics firm Glassnode. Key contributing factors include the participation of long-term conviction investors and a wave of first-time buyers. Glassnode noted on May 26, via Twitter, that the digital asset market’s recent price rally is the result of shifts in investor composition and sentiment interacting in complex ways. > “Conviction buyers tend to spike at key inflection points. In bear markets, their growth may mark the cycle bottoms. In uptrends, these buyers step in to buy dips and stabilize pullbacks. But conviction alone isn’t enough to spark a rally—that’s where First Buyers come in,” highlighted Glassnode in a series of posts. # Conviction Investors and Key Market Turns According to Glassnode, conviction investors exhibit certain behavioral traits, specifically visible at pivotal junctures in market trends. These investors are known to step in at moments of acute market fear or during extreme downturns, often accumulating assets at bear market lows. Their activity is instrumental in defending against price declines and establishing support zones during market corrections. However, while pivotal, conviction buyers alone are insufficient to trigger a robust price rally. Glassnode emphasized that a significant influx of fresh capital, typically driven by first-time buyers, plays the critical role of catalyst. # First-Time Buyers: The Spark Behind Rallies The analysis highlighted two distinct periods—July to December 2024, and March to May 2025—when Bitcoin and Ethereum saw a sharp rise in new entrants to the market, coinciding with rapid price increases. Glassnode observed that these fresh waves of demand propelling Bitcoin price surges often occur when first-time buyers flood the market. > “Understanding who is behind price moves is critical to navigating market cycles,” Glassnode explained. The firm also introduced a new visualization tool based on spending patterns, providing insights into how investor behavior drives both trend reversals and trend continuations across Bitcoin (BTC), Ethereum (ETH), and ERC20 tokens. # Emotional Market Dynamics and Behavioral Analysis Beyond financial behavior, Glassnode also noted the role of emotional decision-making in shaping market trends. Retail investors, driven by fear, market hype, or social media trends, often exhibit herd mentality in their buy and sell decisions. Meanwhile, professional investors strategically capitalize on these emotional currents, frequently taking contrarian positions. To facilitate the study of market sentiments, Glassnode offers a “FOMOmeter” indicator, designed to measure real-time investor emotion and its impact on trading patterns. # A Holistic Approach to Market Trends Glassnode concluded that understanding *who* participates in price movements, as well as *when* and *how* they act, is fundamental to navigating the cyclical nature of the digital asset market. It reaffirmed its commitment to empowering investors with cutting-edge tools to analyze investor behavior across Bitcoin, Ethereum, and ERC20 tokens. Drawing from their findings, the recent upward momentum in digital assets has been driven by three interconnected factors: 1. The accumulation activity by long-term conviction investors around market bottoms. 2. The influx of fresh capital from first-time buyers at key moments. 3. The shifts in market sentiment shaping trading behavior. The combination of these dynamics underscores the complexity of the crypto market’s recent rally, proving that price trajectories are rarely the result of a single cause.