The Bitcoin supply is currently experiencing historic levels of tightness, with Long-Term investors holding an all-time high of coins and significant accumulation ongoing, according to Glassnode’s recent on-chain report. Various on-chain supply metrics highlight this tightness.
The data indicates that Illiquid, HODLed, and Long-Term Holder Supply metrics are all at historical highs, underlining the scarcity of available BTC. This scarcity is reflected in the spending behavior of Short-Term Holders, who appear to be holding onto their assets in light of the market’s rally above the $30,000 threshold.
Investor cost basis analysis suggests that the range between $30,000 and $33,000 holds significant interest for bullish investors, with a notable gap between these levels. The Bitcoin halving is also on the horizon, estimated to be around 166 days away, while approving a spot ETF in the US seems increasingly likely, boosting investor enthusiasm.
Bitcoin Supply Distribution Analysis
The distribution of Bitcoin supply is analyzed from a macro perspective, revealing that long-term Bitcoin investors hold onto their assets, with a significant portion of the circulating supply held for over a year. The Illiquid Supply metric, reflecting coins held with minimal spending history, is at an all-time high, indicating that investors continue to withdraw their coins into custody.
HODLer Net Position Change, which measures the supply held in long-term storage, shows a steady inflow of assets, highlighting the maturation of the Bitcoin supply. This trend results in a growing divergence between Long-Term Holder supply and Short-Term Holder supply, indicating a tightening grip on Bitcoin assets.
Additionally, the Activity-to-Vaulting Ratio (A2VR) reflects this divergence on a macro scale, showing a decline in investor activity since June 2021. It suggests that the vitality of the 2021-22 cycle has been washed out of the market.
Analysis of spending behaviors with the Sell-Side Risk Ratio highlights a reawakening of short-term holders as Bitcoin reached $35,000. On the other hand, long-term holders remain reluctant to part with their assets, resembling previous periods of tight BTC supply.
Moreover, the Accumulation Trend Score metric also shows an influx of Bitcoin across all wallet size categories, indicating growing investor confidence and positive changes in behavior. Small entities like Shrimps, Crabs, and Fish have been accumulating at a significant rate.
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