3/4 of the now illiquid Bitcoin supply

[ad_1]

Bitcoin (BTC) markets have been consolidating since the start of the year, but on-chain measures paint a brighter picture as more of the asset becomes illiquid.

On-chain analytics provider Glassnode took a look at Bitcoin’s supply metrics to get a better view of long-term macro trends in its weekly report on Monday.

The results revealed that although the asset has traded sideways so far this year, more BTC has become illiquid. There has been an acceleration in the growth of illiquid supply, which now represents more than three-quarters, or 76%, of the total supply in circulation.

Glassnode defines illiquidity as when BTC is moved to a wallet with no spending history. The BTC cash supply, which is 24% of the total, is found in wallets that spend or trade regularly, such as exchanges and hot wallets.

“We can see that in the last few months of 2021, even when prices corrected, there was an acceleration from liquid coins to illiquid wallets.”

The numbers suggest that more Bitcoin is being transferred to storage, indicating an increase in storage habits and accumulation. The drop in the very liquid supply also suggests that there may not be a major sell-out or sell-out event in the near future.

Liquid and illiquid BTC supply as a percentage of the total. Source: Glassnode

The researchers concluded that these conditions indicate “a divergence between what appears to be constructive supply-chain dynamics, versus bearish-to-neutral price action.”

Related: Only 1.3 Million Bitcoin Left In Circulation On Crypto Exchanges

In the same report, Glassnode said the total supply held by long-term holders had leveled off over the past month. This suggests that longer term investors have stopped spending or selling coins and have become hodlers or even accumulators at this point. “This provides another constructive view of market conviction,” he concluded.

The current supply held by long-term holders is 13.35 million BTC, down just 1.1% from the October high of 13.5 million coins. Glassnode defines these long-term holders as wallets or accounts that have held their Bitcoin for more than 155 days.

[ad_2]