- As much as 80% of BTC’s circulating supply was illiquid.
- The addresses with at least 1,000 tokens ripped to a 1-month high.
Once seen as a high-risk, high-return investment, sentiment around Bitcoin emerged [BTC] has undergone a profound transformation in the past year. As the dust settles from the bull market euphoria, investors, especially the more seasoned investors, are realizing the long-term growth potential.
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According to a recent post from a well-known on-chain analyst James V. Streets on X, Bitcoin’s illiquid supply has risen rapidly over the past three months. So much so that it now makes up as much as 80% of the total BTC tokens in circulation.
Source: Glassnode
Low exchange rate volumes lead to large movements?
As is known, the supply of illquid is inaccessible for trading, rather locked up by entities in a cold wallet, waiting for BTC to rise in the long term. This approach is often taken by long-term investors who have confidence in an asset’s fundamentals.
Since the parabolic movements in March, Bitcoin trading volumes on the exchanges have gradually declined. With the exception of a few spikes that followed brief periods of bullish and bearish behavior, daily volumes ranged from $10 billion to $15 billion. This was in stark contrast to the intense trading activity of the past two years.
Source: Sentiment
However, if analysts are to be believed, the volume drought could be a harbinger of wild price swings in both directions. James V. Straten further noted in his message that:
“As the order book thins, explosive moves up or down become more violent.”
The dull trading activity in the exchanges was also attributed as one of the main factors responsible for the August 17 market crash.
Whales swim towards Bitcoin
Since freefalling earlier this month, Bitcoin has been on a sideways trend, clinging to the $26,000 zone, according to data from CurrencyMarketCap. As the market stabilized at these levels, Bitcoin whales returned to their old habits.
According to a recent update from Glassnode, addresses with at least 1,000 tokens have ripped 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 should be remembered that a significant portion of whale investors contributed to the selling pressure during the market crash. In fact, these seasoned players had started unloading their bags in the days leading up to the carnage.
However, now that Bitcoin has become range-bound, they started replenishing their stocks. Moreover, it confirmed their belief that Bitcoin will soon head north.
In addition to whales, individual investors also found a liking for the king coin. Addresses storing at least 1 BTC hit a new all-time high recent post from Glassnode. The steady rise in retail investor demand for Bitcoin was a sign that the goals of widespread adoption, as proposed by its proponents, were on the right track.
Bitcoin’s dormant supply has also hit new highs in 2023, reflecting the steadfastness of long-term investors. As shown below, most age groups showed a desire to hold BTC for longer periods.
In some ways, this tendency made Bitcoin resemble a long-term investment like gold, mutual funds, and real estate. 
Source: Glassnode
Traders remain hopeful
There’s an old adage among technical analysts that says, “The longer the base, the higher in space.” Simply put, this means that the longer an asset consolidates sideways, the stronger the move when it finally starts.
A well-known Bitcoin trader recently pointed out that the ongoing bear market had lasted 490 days at the time of his post. Based on his analysis of historical price movements, the trader/analyst predicted a strong bull market for the next few days.
Needless to say, we should not forget that cryptos remained in the riskier asset class, 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 is 1.10.100 BTC worth today?
What can you expect next?
Bitcoin’s recent crash was a reflection of market uncertainty, with approval of Bitcoin ETFs in the United States not likely to happen immediately.
Going forward, the decision on BlackRock’s application and developments surrounding Grayscale’s legal action against the US Securities and Exchange Commission (SEC) could prove to be the big catalyst for Bitcoin’s price.