Supply shock: Bitcoin changing hands drops to 2015 levels

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Bitcoin’s short-term supply continues to decline as the number of BTC changing hands falls to 2015 levels.

Bitcoin’s short-term supply drops to 2015 levels

According to the latest report from Arcane Research, the BTC supply shock continues as the number of coins changing hands drops to levels not seen since 2015.

The “number of Bitcoins changing hands” here refers to all the coins that have been spent recently. “Recent” depends on the analyst definition, but the report chart uses the 1 month and 3 month supply metrics.

This offer is often referred to as “short term” as these coins are associated with traders looking to make quick profits.

On the other hand, the long-term supply shows the number of coins that have not moved in the last few months, and therefore the indicator is associated with long-term holders.

Now, here’s what the 3-month and 1-month supply chart for Bitcoin has looked like lately:

Short-term supply of BTC appears to be declining | Source: Weekly Arcane Research Update – Week 36

As the chart above shows, only 6.8% of the circulating supply changed hands in the past month, while the 3-month metric figure is around 15.8%.

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The 1-month bitcoin supply is actually at its lowest level right now, while the 3-month supply is around levels similar to 2015.

The recent surge above $ 50,000 saw a slight increase in supply over 1 month, but this was mainly due to coins last spent within 1 to 3 months. Therefore, only short-term holders looking to make a profit moved their BTC during this time.

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This means that long-term holders haven’t moved their coins amid these recent rallies and are waiting for the price of Bitcoin to appreciate further before moving their assets. The weakness of supply in the short term may therefore prove to be a bullish indicator.

BTC price

At the time of writing, the price of Bitcoin is floating around $ 47.5,000, up 2.7% in the past 7 days. Over the past month, the crypto has gained 2.4% in value.

The graph below shows the evolution of the price of the coin over the last three months:

BTC seems to have finally gained some upward momentum | Source: BTCUSD on TradingView

After a period of relatively low volatility, Bitcoin finally registered a significant price movement. For now, the coin appears to be trending back up as it gains ground above $ 47,000.

It’s unclear at this point where the crypto might head next, but if the short-term supply is low, long-term investor sentiment appears to be bullish.

Featured image from Unsplash.com, charts from TradingView.com, Arcane Research

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