Bitcoin (BTC) may be in for a supply shock . Blockchain data shows that 57% of all BTC has not seen any movement for at least two years.
The number of BTC without movement is recording new all-time highs
As Capriole Investments founder Charles Edwards pointed out in a post on the X Network (formerly Twitter), the amount of BTC, which has not moved for at least two years, has recently been hitting new all-time highs (ATHs).
Investors who hold such ” old ” bitcoins belong to a wider group of “long-term holders” (LTH). LTHs refer to investors who hold their coins for at least 155 days. It is a statistical fact that the longer holders hold their coins, the less likely they are to move them at any time.
The 2+ year segment then includes investors who are among those with the strongest diamond hands among these HODLers. Their holding period is then significantly longer than the mentioned 155 days.
The following graph shows (in percentage terms) how this group of LTH holders has evolved over time, along with the price of the primary cryptocurrency .
As you can see, the value of this metric has been increasing in recent days. As this chart shows us, the nquantity of BTC held by these LTHs has been on an upward trajectory since the fall of FTX, constantly setting new ATHs.
Recently, the growth of this metric has slowed down a bit, but it is still going up. Currently, approximately 57% of the total amount of Bitcoins is locked in the hands of these HODLers.
Edwards notes that this creates a massive supply squeeze for the cryptocurrency. A similar trend was observed in the period leading up to all past bull runes (indicated by green lines in the chart).
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The amount of BTC on the exchanges is decreasing
According to Edwards , the fact that the US Securities and Exchange Commission (SEC) has finally approved a spot ETF for bitcoin could lead to a supply shock. Moreover, it will only deepen, because ETFs have only been approved for CASH (not in-kind) subscriptions. So each purchase takes more bitcoins off the market.
Analyst James V. Straten shared a chart that could also provide another perspective on the supply shock brewing in this asset.
The chart above shows data on the percentage of bitcoins that are in the wallets of centralized exchanges. On the contrary, this metric has been declining in recent days, and now only 12% of all BTC is stored on these platforms. It means that the effective trading supply of this asset is reduced.
At the time of writing, the price of BTC is around 45,781 USD according to KMC .
Conclusion
Bitcoin has shown us an increased level of volatility in recent days. But the data from the blockchain speaks quite clearly, the amount of bitcoins for sale is still decreasing. This could perhaps soon be reflected in the price as well.
