Wait and see approach: 3/4 of Bitcoin supply now illiquid

Bitcoin
markets
have
been
consolidating
since
the
beginning
of
the
year,
but
on-chain
metrics
are
painting
a
more
positive
picture
as
more
of
the
asset
is
becoming
illiquid.

On-chain
analytics
provider
Glassnode
has
been
delving
into
Bitcoin
supply
metrics
to
get
a
better
view
of
the
longer-term
macro
trends
in
its
weekly
report
on
Jan.
3.

The

findings

revealed
that
although
the
asset
has
been
trading
sideways
so
far
this
year,
more
BTC
has
become
illiquid.
There
has
been
an
acceleration
in
illiquid
supply
growth
which
now
comprises
more
than
three
quarters,
or
76%,
of
the
total
circulating
supply.

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

“We
can
see
that
over
the
final
months
of
2021,
even
as
prices
corrected,
there
has
been
an
acceleration
of
coins
from
liquid,
into
Illiquid
wallets.”

The
figures
suggest
that
more
Bitcoin
is
being
transferred
into
storage
indicating
an

increase
in
hodling
habits
and
accumulation
.
The
decline
in
highly
liquid
supply
also
hints
that
there
may
not
be
a
major
selloff
or
capitulation
event
at
any
time
in
the
near
future.

BTC
liquid
and
illiquid
supply
as
a
percent
of
the
total:
Glassnode

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



Related:




Just
1.3
million
Bitcoin
left
circulating
on
crypto
exchanges

In
the
same
report,
Glassnode
stated
that
the
total
supply
held
by
long-term
holders
has
plateaued
over
the
past
month
or
so.
This
suggests
that
longer-term
investors
have
stopped
spending
or
selling
coins
and
have
become
hodlers
or
even
accumulators
at
this
stage.
“This
provides
another
constructive
view
of
market
conviction,”
it
concluded.

The
current
supply
held
by
long-termers
is
13.35
million
BTC,
a
decline
of
just
1.1%
from

October’s
high
of
13.5
million
coins
.
Glassnode
defines
these
long-term
holders
(LTH)
as
wallets
or
accounts
that
have
held
their
Bitcoin
for
more
than
155
days.

read original article here