- Bitcoin’s illiquid supply hit a new ATH, indicating confidence in its long-term potential.
- BTC accumulation and circulation continue to increase.
A jump from just under $16,000 to over $37,000 is usually reason enough Bitcoin [BTC] investors to take profits. But for coin holders with minimal sales history, now is not the time.
In fact, based on the sentiment of this cohort, the pre-halving price rally for Bitcoin could be the best season to keep BTC off the exchanges.
Don’t worry about the hype
To reach this conclusion, Glassnode looked at Bitcoin’s illiquid supply. The analytics handle noted that the metric had reached its All-Time High (ATH).
The #Bitcoin The illiquid supply metric, which measures the amount of supply in wallets with minimal spending history, is at an ATH of 15.4 million BTC.
Changes in illiquid supply often coincide with currency withdrawals, indicating that investors continue to withdraw their coins… pic.twitter.com/lwHQmFkoMy
— glassnode (@glassnode) November 10, 2023
An entity is considered illiquid if it refuses to convert its assets into cash. This type of action is considered bullish. Thus, illiquid supply hitting an ATH indicates a surge in Bitcoin’s popularity positive long-term potential.
The decision to hold Bitcoin can also be reflected in the Accumulation Trend Score.
Whenever AMBCrypto analyzes the accumulation trend score, we find out whether entities are accumulating BTC on-chain. It also tells whether market participants are selling.
Values close to zero of the metric means that sell-offs are much more than takeovers.
In this case, the price action may be negatively affected. On the contrary, values close to 1 indicate an increase in accumulation. Unlike the distribution period, accumulation precedes a rising Bitcoin price.
Source: Glassnode
At the time of writing, the Bitcoin Accumulation Trend Score had increased to 0.98. This reading, as explained above, is a sign that BTC’s value could rise again in the future short term.
The funds find a new home
Lately, altcoins have been outperforming BTC, indicating that market players may be overlooking the king coin. From Bitcoin dominance chart, this seemed to be the case, as the value had fallen from a high of 52.78% to 52.59%.
Source: TradingView
This decline implies that the liquidity initially allocated to BTC is being rotated to other cryptocurrencies. Another metric that supports this conclusion is weighted sentiment.
The Weighted Sentiment considers the positive/negative commentary associated with an asset around social media platforms.
Previously, specifically on November 9, Bitcoin’s weighted sentiment was 1.006. But at the time of writing, the metric had flattened out at 0.002. This drop indicates that average market participants were indifferent to BTC’s price action.
This could also remain the case as long as other altcoins continue their recent performance. Furthermore, the past seven days have led to a to get up in the BTC circulation. According to data evaluated by Santiment, circulation increased to 441.00.
Source: Santiment
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This increase indicates an increase in the use of the royal coin and its transfer from one address to another. The increase in the metric also means that there is more demand for BTC.
However, demand must continue to match or even exceed supply for the price to remain above $37,000.