Bitcoin’s Supply Hits New Low: Illiquidity Sparks Price Hike Speculation

New Data Reveals: Bitcoin’s Supply is Now Illiquid, Price Hikes on the Horizon?

New data indicating an increase in scarcity and potential price hikes suggests that Bitcoin’s supply is now illiquid, with the possibility of its price being affected by this significant shift. Glassnode, a blockchain analytics company, has identified these liquid entities based on their past spending patterns, with 74% of the 19.75 million Bitcoins in circulation being held by entities that are not expected to sell off.

By examining the ratio of cumulative outflows and inflow, the company is able to determine if it is willing to part with its Bitcoin holdings. This data can offer valuable information on the behavior of investors of different types, from short-term speculators to more seasoned HODLers. The figures reveal that these liquid entities have 14.61 million BTC, which is worth over $826 million at current prices. As a result, much of the total circulating supply is effectively removed from circulation, which lowers the amount of liquidity available, potentially driving up prices.

The implications are significant, as it indicates that the supply of Bitcoin is diminishing. With an increase in the number of coins being held by entities that are unlikely to sell, the pool of accessible Bitcoin will become smaller. The possibility exists that the scarcity may cause heightened demand, which could translate into higher prices. It’s worth noting that this trend has been building momentum for some time, with the illiquid supply reaching a new high of almost 74% of the overall circulating supply.

Despite market fluctuations, the price of Bitcoin is still far from its previous high of over $70,000 in the first quarter, which is a significant increase from previous levels. This also underscores the growing determination of investors to maintain their hold on the digital currency. Nevertheless, the growing illiquid supply could pave the way for a price increase in the next few months.

This trend is being closely monitored by investors and analysts, as it could have sweeping effects on the market’s overall direction. As more Bitcoin is demonetized, there is fewer supply sources, and the laws of supply and demand begin to take hold. Meanwhile, this data highlights the increasingly HODL-oriented nature of the Bitcoin market. The market is gradually transitioning towards a more mature, long-term focused environment as investors continue to hold onto their coins.

Given the growing amount of illiquid, will there be any significant changes in the market over time? Will prices rise due to scarcity or are there other factors that could dampen the trend? The data is clear, but it’s important to note that some uncertainty persists.

For more insights and information on the impact of illiquid supply on Bitcoin’s price, check out this article on CoinSeeks.com: The Effect of Illiquid Supply on Bitcoin’s Price

The illiquidity of Bitcoin’s supply has reached an unprecedented level, and the market is taking notice.