- Long-term holders now possess an all-time high proportion of Bitcoin’s supply, indicating a tightening market.
- Bitcoin’s sustained price above $34,000 is supported by robust on-chain data, reflecting investor optimism and strategic accumulation.
Accumulation Patterns Prevail in Bitcoin Market
As Bitcoin (BTC) forges a path to its 2023 zenith, data provided by Glassnode presents a compelling narrative of strategic accumulation by steadfast investors. The prevailing pattern showcases a substantial decline in Bitcoin‘s liquid supply, as more of the cryptocurrency is locked into the hands of long-term holders.
Strategic Holding: The Illiquid Supply Swells
Within the intricate dynamics of the Bitcoin ecosystem, a significant shift is underway. Glassnode’s meticulous analysis pinpoints a substantial increment in Bitcoin’s illiquid supply—coins that are held tightly and not readily sold on the market. This swelling pool of Bitcoin is predominantly in the hands of smaller, resolute entities committed to holding for extended periods.
These entities, affectionately termed “Shrimps” by the crypto community, are consistently increasing their holdings, accounting for a substantial absorption of Bitcoin‘s newly mined supply. To distill the essence of this phenomenon: an overwhelming 92% of Bitcoin’s fresh supply is being snapped up by these investors.
A Duel of Holders: Long-Term vs. Short-Term
The data unfolds a narrative of a thriving cohort of long-term holders, who, since July 2023, have escalated their dominance over short-term holders to unprecedented levels. This redistribution of Bitcoin‘s custody from transitory to steadfast investors has culminated in a significant dwindling of the short-term holder supply to all-time nadirs.
The repercussion of this holder tussle? A robust tightening of Bitcoin’s circulating supply, fortifying its price resilience. This market tightening is contributing to Bitcoin‘s steadfast valuation above $34,000 and is laying down a potent price support baseline at the $30,000 threshold.
The Bullish Signal of Illiquid Coins
Illiquid coins—a term denoting Bitcoin that is not just unspent but held with a long-term view—serve as a bullish beacon within the market. As Glassnode elucidates, the influx of illiquid Bitcoin maintains its stride, posting net increments of 71,000 BTC monthly.
Confidence Surges Amongst Bitcoin’s Investor Spectrum
The burgeoning confidence in Bitcoin spans beyond the confines of smaller entities. The investor landscape at large, encompassing various cohorts, is witnessing a year-to-date augmentation in Bitcoin holdings. This ascending trajectory of Bitcoin accumulation is a testament to a robust, confidence-fueled market, hinting at a strong foundation for future valuation stability.