There isn’t much supply left for buyers, which could lead to a supply shock in the future
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The Bitcoin market is preparing for a seismic shift as the reality of its scarcity becomes more apparent. Recent data has revealed a startling fact: a whopping 88% of the total supply of Bitcoin has not moved in at least three months. This holding trend, colloquially known as “HODLing,” demonstrates long-term investors’ unwavering belief in the intrinsic value of this groundbreaking cryptocurrency.
A Glassnode chart illustrating Bitcoin HODL Waves shows layers of investor behavior over time, with colors representing different time periods in which Bitcoins have been held. The predominance of cooler tones confirms that the majority of Bitcoin has not been traded or sold for extended periods, reinforcing the scarcity narrative.
As the market grapples with the 12% of Bitcoins actively in circulation, the scarcity principle suggests an inevitable increase in value. Economics 101 dictates that as a commodity becomes rarer, its demand-price ratio comes under pressure. With only a fraction of the supply left for potential buyers, competition to acquire Bitcoin is expected to intensify.
The second chart, a snapshot of Bitcoin’s price action, shows an uptrend, with the price supported by rising moving averages – a bullish indicator for market analysts. This chart is evidence of growing momentum as Bitcoin rises within its uptrend channel, suggesting the market is reacting to scarcity.
The narrative is clear: Bitcoin is becoming a rare commodity. As more of the supply becomes illiquid, those looking to buy Bitcoin could face stiff competition that drives up prices. The market has spoken; It’s not just about who buys Bitcoin, but also about who can afford to buy it.
About the author
Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.
Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with in-depth analysis of crypto projects, and technical analysis of cryptocurrency trading pairs.
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