The “hold” continues to dominate among Bitcoin (BTC) investors. Three quarters of Bitcoins in circulation are now illiquid, according to a new report from analytics firm Glassnode. What does this mean?
76% of the Bitcoin supply is illiquid
As the Glassnode publication points out, the Bitcoin (BTC) price has started the year with little fanfare, stuck in the range it had already occupied for several weeks. The calm is also widespread, according to the analysis:
“There is a general lack of activity, despite a moderately bullish trend in supply dynamics. “
The supply of Bitcoin is indeed trending towards increasing illiquidity. That is, BTCs are being sent to wallets that have never spent coins, or dormant wallets. This suggests that they are being stored for the long term, and are not intended to be sold quickly.
A rather positive trend
As can be seen from the following chart, this trend has been observable over time, since the price drop last spring:
Bitcoin liquid/liquid supply evolution (Source: Glassnode)
Three quarters of the Bitcoin supply is now illiquid. This is notable considering the lack of movement in the BTC price:
“Current conditions show a divergence between what appear to be constructive supply dynamics, and bearish or neutral price movements. “
Translation: when so many coins are directed to inactive portfolios, it is usually at the time of price increases, and not in a “bearish” context such as the one we are currently experiencing. In any case, this shows that massive selling does not seem to be on the immediate horizon for Bitcoin.
This is further confirmed by another indicator: the number of long-term holders, i.e. BTC stored for more than 155 days according to Glassnode’s methodology. They currently hold 13.35 million BTC, close to last October’s record of 13.50 million BTC:
Number of BTC held by long-term investors (Source: Glassnode)
While the BTC price is not generating much enthusiasm at the beginning of the year, this data indicates that investors are confident. It remains to be seen whether this will allow the Bitcoin price to rise again
