- A whopping 80% of the circulating BTC supply was illiquid.
- Addresses with at least 1,000 tokens hit a 1-month high.
Once considered a high-risk, high-return investment, the sentiment surrounding Bitcoin [BTC] has undergone a profound change in the last year. As the dust settles on the bull market euphoria, investors, particularly the experienced ones, are recognizing the company’s long-term growth potential.
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According to a recent post on X by well-known on-chain analyst James V. Straten, Bitcoin’s illiquid supply has skyrocketed over the past three months. So much so that it now accounts for a whopping 80% of all BTC tokens in circulation.
Source: Glassnode
Low exchange volumes lead to large movements?
As is well known, the supply of illiquid funds is inaccessible for trading and rather is being locked up by companies in a cold wallet in anticipation of a long-term surge in BTC price. This approach is often taken by long-term investors who have confidence in an asset’s fundamentals.
Bitcoin trading volumes on exchanges have progressively declined since the parabolic moves in March. With the exception of a few rallies that followed brief bouts of bullish and bearish behavior, daily volumes have ranged from $10 billion to $15 billion. This was in sharp contrast to the intense trading activity of the past two years.
Source: Santiment
However, if the analysts are to be believed, the volume drought could be a harbinger of violent price swings in either direction. James V. Straten further pointed out in his post that
“The thinner the order book gets, the more violent explosive moves up or down become.”
Subdued trading activity on the stock exchanges was also seen as one of the main reasons for the August 17 market crash.
Whales are swimming towards Bitcoin
According to data from CoinMarketCap, Bitcoin has been trending sideways since freefalling earlier this month and is clinging to the $26,000 zone. As the market stabilized at these levels, bitcoin whales went back to their old ways.
According to a recent update from Glassnode, addresses with at least 1,000 tokens have dropped to a 1-month high.
📈 #Bitcoin $BTC Number of Addresses Holding 1k+ Coins just reached a 1-month high of 2,020
View metric:https://t.co/cjV0krRVgK pic.twitter.com/BN1Bes168K
— glassnode alerts (@glassnodealerts) August 27, 2023
It is worth remembering that a significant portion of whale investors contributed to the selling pressure during the market crash. In fact, in the days leading up to the bloodbath, these veteran players had started dumping their bags.
However, with bitcoin now locked in a price range, they started to stock up. Additionally, it confirmed their belief that Bitcoin will soon move north.
In addition to whales, private investors also liked the royal coin. Addresses with at least 1 BTC hit a new all-time high, according to a recent post from Glassnode. The steady increase in retail investor demand for Bitcoin was a sign that the goals of widespread adoption that proponents aspired to were on track.
The dormant supply of bitcoin has also reached new highs in 2023, reflecting the steadfastness of long-term investors. As shown below, most age groups showed a desire to hold BTC for a longer period of time.
In some ways, this bias makes Bitcoin akin to a long-term investment like gold, mutual funds, and real estate. 
Source: Glassnode
Traders remain hopeful
There’s an old adage among technical analysts, “the longer the base, the higher in space.” Put simply, the longer an asset consolidates sideways, the stronger the move when it finally begins.
A well-known Bitcoin trader recently pointed out that the ongoing bear market had spanned 490 days at the time of his post. Based on his analysis of historical price movements, the trader and analyst predicted a strong bull market in the coming days.
Of course, one should not forget that cryptos still remained in the category of riskier assets, and this is always important for DYOR.
490 days of #Bitcoin bear market and still counting…
The bull market will be huge. pic.twitter.com/L2lxOfTWd7
— Mister Crypto (@misterrcrypto) August 26, 2023
How much are 1.10.100 BTCs worth today?
What to expect next?
Bitcoin’s recent crash reflected market uncertainty that approval of Bitcoin ETFs in the United States may not be immediate.
Going forward, the decision on BlackRock’s filing and developments surrounding Grayscale’s legal action against the Securities and Exchange Commission could prove to be major catalysts for Bitcoin’s price.
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