The illiquid supply and demand for BTC is rising, which may cause a supply shock in the future
Sixty-three percent of Bitcoin’s total supply remains illiquid for the past year, down 0.3% from the new all-time high. In addition to the increase in supply held long term, there is also an indication of “weak hands” selling their holdings more actively compared to investors who bought BTC a long time ago.
As data provided by Will Clemente suggests, the supply that has not moved in over one year is increasing, which shows that more investors choose to hold over active speculation and trading.
Why is long-term holding a good factor for the market?
While an increase in illiquid supply might be seen as a negative in terms of traditional economics, soaring unspent coins would lead to the gradual rise in price of an asset, according to the simple law of supply. and demand.
Since less supply is available for trading, holding and using while demand remains the same, the price of the asset will most likely rise over the time. But with Bitcoin, the market and holders are exposed to other factors like unpleasant investment conditions, regulations and other limitations.
Bitcoin is gaining momentum
Following the four-month correction in the market, Bitcoin finally broke out of the long-term range where it had been moving steadily from $45,000 to $37,000 for about 55 days.
Thanks to inflows into the cryptocurrency market, the first cryptocurrency could regain over 20% to its value in less than a month.
At press time, Bitcoin is trading at $46,380 and remains above all short and medium-term resistance previously existing on the chart. In addition to the positive price performance, the technical indicators on the chart are also pointing in the direction of the price.
