The still supply of bitcoin continues to grow despite falling prices. This has several implications for the digital asset, the main one being the volume of supply available on the open market. For most bull rallies in the past, this static supply remained low, declining at points where investors dumped their bags to avoid the crash. But this illiquid supply is once again on the rise.
60% of Bitcoin in immobile supply
Bitcoin has maintained its position as the top investment in crypto. This is why owning cryptocurrency is one of the most coveted positions in the space. However, instead of buying these digital assets and selling them for a profit at a later date, holders of most of the supply have chosen to hold on to their coins, leading to a large portion of the supply not moving for the duration. a long time.
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These bitcoins have not been transferred in at least a year and have remained intact in that period of time. On-chain data shows that these investors are choosing to hold long-term gains over short-term gains. In terms of investment, these investors have continued to increase their balances or, at least, have maintained their holdings. This long-term holding sentiment has led to over 60% of the entire BTC supply remaining in place over the past year.
BTC reverses above $39,000 | Source: BTCUSD on TradingView.com
For a more precise figure, Glassnode reports that 60.61% of all bitcoins have still not moved in over a year as of February 18, which was last week. These holdings have remained in place or ‘dormant’ in this time period, showing that investors are not planning to move their holdings any time soon. For the most part, the largest investors known as whales are behind most of the unmoved supply, increasing their investments as time goes on.
But why is BTC declining?
Despite more than 60% of the supply remaining unchanged, the price of bitcoin has taken one hit after another. Usually holding sentiment among investors would point towards bullish sentiment and this would trigger a rise in value, but not this time. As sentiment has ebbed across the space, so has the desire to hoard coins among investors, which is evident in most of the small holders said to be behind the recent drop.
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The indicators also show that investors are less likely to buy the digital asset at the prices they have been in recent months. Bitcoin is now trading below its average from last year, and its drop below the 50-day simple moving average (SMA) means more downtrends in the near future.
However, some investors are not discouraged and have used this as an opportunity to increase their cryptocurrency bags. However, this accumulation trend is too weak to have any impact and Bitcoin continues to take a dip as it heads out of the weekend.
Featured Image from PCMag, Chart from TradingView.com
This post Bitcoin Sets the Stage for Reversal as Stationary Supply Approaches All-Time High
was published first on https://www.newsbtc.com/analysis/btc/bitcoin-sets-stage-for-reversal-as-unmoved-supply-nears-all-time-high/
