The latest data from blockchain analytics firm Glassnode indicates a historically tight circulating supply of Bitcoin, as long-term investors hold onto their assets more firmly than ever.
This metric, which tracks the activity of long-term holders, suggests that 68% of Bitcoin’s circulating supply has been stationary for more than a year. Furthermore, nearly 30% of Bitcoins have not been moved for over five years, underscoring the long-term confidence of investors in the digital currency.
The “illiquid supply” metric, which measures the amount of Bitcoin in wallets that rarely transact, has also peaked at an unprecedented 15.4 million BTC. The monthly increase rate of this illiquid supply is on a consistent upward trajectory, with over 71,000 Bitcoins becoming illiquid each month.
This accumulation coincides with substantial withdrawals of Bitcoin from exchanges, as investors transfer their holdings to private custody.
Since May 2021, more than 1.7 million BTC have been removed from exchanges, suggesting a preference for personal storage over trading potential.
In contrast to the steadfast long-term holders, Glassnode notes a stark divergence in the behavior of short-term investors, whose supply has dipped to record lows.
The recent Bitcoin rally past the critical $30,000 threshold has altered the spending patterns of these short-term investors, with the $30,000 mark emerging as a pivotal level for market bulls.
As the world’s leading cryptocurrency by market value, Bitcoin’s price has risen by 1.3% in the last day alone, reaching $35,272 at 9:48 a.m. in New York, as reported by CoinGecko.
The data and market movements collectively point to a potential shift in market dynamics, favoring a bullish outlook for Bitcoin’s future.