Illiquid supply and demand for BTC is increasing, which might cause a supply shock in the future
Contents
- Why is long-term holding a good factor for the market?
- Bitcoin is gaining momentum
Sixty-three percent of total Bitcoin supply remains illiquid for the past year, 0.3% below the new all-time high. In addition to the increase in supply held long term, there is also an indication of “weak hands” selling their holdings more actively compared to investors who bought BTC a long time ago.
According to data provided by Will Clemente suggeststhe supply which has not moved for more than a year is increasing, showing that more investors are choosing to keep active speculation and trading.
Why is long-term holding a good factor for the market?
While an increase in illiquid supply might be seen as a negative in terms of traditional economics, soaring unspent coins would lead to the gradual rise in price of an asset, according to the simple law of supply. and demand.
63.15% of Bitcoin supply has not moved for at least 1 year.
This is only 0.3% less than an all-time high. pic.twitter.com/zfcMDrSeGh
– Will Clemente (@WClementeIII) 2 avril 2022
Since less supply is available to trade, hold and use while demand remains the same, the price of the asset will most likely rise over time. But with Bitcoin, the market and holders are exposed to other factors such as unpleasant investment conditions, regulations, and other limitations.
Bitcoin is gaining momentum
Following the four-month correction in the market, Bitcoin finally broke out of the long-term range where it had been moving steadily from $45,000 to $37,000 for regarding 55 days.
Thanks to the influxes into the cryptocurrency market, the first cryptocurrency might recover more than 20% of its value in less than a month.
At press time, Bitcoin is trading at $46,380 and remains above all short and medium-term resistance previously existing on the chart. In addition to the positive price performance, the technical indicators on the chart are also pointing in the direction of the price.
