25 Apr 2022
BTC’s liquid supply see substantial decline, strong accumulation?The share of BTC’s supply not having moved in 1 year or more has never been higher, currently sitting at 64%. On-chain analysts are interpreting this as a positive sign of accumulation.
The logic behind this assumption is that more coins are HODLed “under the mattress” than lifted off to the market, leading the percentage share to increase of older UTXOs. Accumulation has thus outpaced distribution over the last year.On-chain analysts have also remarked that exchanges' BTC balances are rapidly declining. Pointing toward a less liquid supply, which eventually should create a potent rally environment.On-chain analysts have noted that similar patterns previously have been followed by strong BTC rallies, speculating on similar outcomes in the near future. We urge traders to be diligent and asses the maturing market structure before blindly falling for the hopium provided by simply examining on-chain data at a macro level.While these patterns might have foreshadowed previous bull markets, the market structure has evolved, as we note in this article.