Bitcoin Hot Supply Metric Declines by 50%, Signals Possible Price Breakout
Bitcoin’s hot supply metric has dropped over 50%, indicating a potential price breakout. This significant decrease suggests that traders are holding onto their assets rather than selling, reflecting a bullish sentiment in the market. Bitcoin recently rose in price, signaling increased activity and interest among investors.
Recent technical indicators suggest an imminent price breakout for Bitcoin (BTCUSD), the leading cryptocurrency. Notably, Bitcoin’s “hot supply” metric has seen a significant reduction, dropping from 5.9% to 2.8% in the past three months. This decline, exceeding 50%, indicates a decrease in the number of Bitcoin units being actively traded.
The term “hot supply” refers to Bitcoin that has been moved or transacted within the last week. Recent data from Glassnode highlights a sharp decline in the circulating supply of Bitcoin that is currently active in the market, suggesting that holders are less inclined to sell their assets. Traders appear to be anticipating a price recovery, which may reflect a strategic decision to hold Bitcoin during the recent market stagnation.
This reduction in hot supply could tighten market liquidity, creating challenges for larger purchases of Bitcoin. Analyst predictions indicate that if supply continues to dwindle, it could result in a supply squeeze, potentially driving prices higher in the face of steady or increasing demand.
A historical analysis shows that diminishing hot supply often reflects accumulation by stronger market participants, typically long-term holders who are less likely to sell impulsively. This trend is seen as bullish for Bitcoin as fewer available coins may lead to increased prices due to heightened demand.
In the last 24 hours, Bitcoin has experienced a notable rise, reaching a high of $87,443.27 from $83,440. Currently, it is trading at $85,256.80, displaying a 2.22% increase, with trading volume remaining robust at $37.81 billion or 59.54%.
In summary, the recent significant decline in Bitcoin’s hot supply metric indicates a shift towards accumulation among long-term holders. This trend suggests diminished market liquidity and potential for a price increase due to a tightening supply. As Bitcoin currently shows positive price movement, market sentiment remains bullish, reflecting optimism for future gains.
Original Source: www.tradingview.com
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