Bitcoin’s new all-time highs appear to have been triggered by a dramatic reduction in active supply over recent months.
Bitcoin investors appear to be increasingly sitting on their hands in hopes of higher prices, with the share of Bitcoin’s supply that has remained inactive for the past three months spiking to a record high of 85%.
On-chain analytics provider Glassnode identified the milestone in its Nov. 8 “The Week Onchain” report, concluding: “Investors are just not spending their coins.”
Addresses that have not moved their BTC in 12-months, dubbed “long-term holders” (LTH), are among those most actively stockpiling coins — with said addresses moving just 6,500 BTC daily.
The trend of accumulation does not appear to be slowing down, with the share of supply held on centralized exchanges also dropping to a record low of 12.9% as BTC is increasingly placed into secure storage.
Glassnode reports that more than 5,000 BTC (approximately $338.6 million) was withdrawn from centralized trading venues during last week. The report asserted:
“The market is likely still in the quiet accumulation phase, punctuated by low activity, large exchange outflows, and very modest strategic spending by experienced holders.”
Bitcoin broke into new all-time highs above $67,000 on Nov. 8, with its market capitalization also surpassing that of Tesla and Facebook.
Related: BTC price ‘ready to rally,’ with Bitcoin bulls clear to charge at $85K — Analysis
The report notes that increased Bitcoin accumulation from long-term holders served as a precursor to April’s previous BTC all-time high as well.
The share of Bitcoin’s supply represented by long-term holders reached a high of 80.6% in August 2020 before leading to April 2021’s highs of roughly $66,000.
Since the $66,000 price point, LTHs spent 0.73% of the Bitcoin supply, reducing the amount of supply they held to about 68%.
Source: cointelegraph.com