3/4 of Bitcoin supply is now lacking liquidity

Since the beginning of this year, the Bitcoin market has been consolidating, but as more and more assets become illiquid, on-chain indicators paint a more positive picture.

On-chain analytics provider Glassnode has been studying Bitcoin supply metrics in depth to better understand long-term macro trends in its weekly report on January 3rd.

This Find It was revealed that although the asset has been trading sideways so far this year, more BTC has become illiquid. The growth of illiquid supply has accelerated and currently accounts for more than three-quarters of the total circulating supply, or 76%.

Glassnode defines illiquidity as the transfer of BTC to a wallet with no consumption history. Liquidity supply BTC accounts for 24% of the total and is located in wallets that are regularly consumed or traded, such as exchanges and hot wallets.

“We can see that in the last few months of 2021, even if the price is corrected, the transfer of tokens from liquid to illiquid wallets is accelerating.”

These numbers indicate that more bitcoins are being transferred to storage, which indicates Increase holding habits and accumulationThe decline in high-liquidity supply also implies that there may not be a major sell-off or capitulation at any time in the near future.

BTC liquidity and illiquid supply as a percentage of total: Glassnode

The researchers concluded that these conditions indicate that “there is a divergence between what appears to be constructive on-chain supply dynamics compared to bearish-to-neutral price movements.”

related: Only 1.3 million bitcoins left in circulation on crypto exchanges

In the same report, Glassnode stated that the total supply held by long-term holders has stabilized in the past month or so. This shows that long-term investors have stopped consuming or selling coins and become hoarders or even accumulators at this stage. “This provides another constructive view of market beliefs,” it concluded.

The current holdings of long-term Bitcoin holdings are 13.35 million, only 1.1% lower than the same period last year Set a high of 13.5 million tokens in OctoberGlassnode defines these long-term holders (LTH) as wallets or accounts that hold Bitcoin for more than 155 days.

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