Bitcoin Accumulation and Tightening Supply
According to data from Glassnode, Bitcoin is currently in an accumulation pattern with its available supply reaching a new historical low. This is due to the rise in Bitcoin’s illiquid supply and long-term holders cohort.
The report suggests that smaller, long-term holding entities are purchasing the available BTC as the supply tightens. In fact, these entities are said to be gobbling up “92% of the newly mined supply” based on Glassnode analysis.
On the backs of smaller entities gobbling up Bitcoin’s minted supply, long-term holders have reached new highs versus short-term holders. This has resulted in a tightening of the BTC supply available for purchase, which is potentially contributing to keeping the Bitcoin price above $34,000 and providing strong support above $30,000.
Bitcoin Price Breakout and Illiquid Supply
LMAX Group market strategist Joel Kruger believes that a Bitcoin price breakout to $40,000 could occur with a break above $36,000. The growing confidence in Bitcoin amidst the tightening supply is not limited only to smaller entities. Nearly all entity cohorts are increasing their Bitcoin holdings year-to-date.
Hot Take: Confidence in Bitcoin Amidst Tightening Supply
The data from Glassnode points to a bullish market indicator for Bitcoin as its illiquid supply continues to grow amidst a tightening of the available supply for purchase. The confidence in Bitcoin is reflected in the increasing holdings across all entity cohorts, which could lead to a potential breakout in its price.
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