3 years ago
170 There is a continuing trend of investors accumulating bitcoin which is causing market liquidity to plunge and, in turn, helping push prices higher. The long-term investors are seen to continue hoarding bitcoin, sucking up market supply considerably which has enabled the crypto to maintain its wider upward trajectory.
Data acquired from Glassnode shows the total balance of bitcoin (BTC) held in the ‘accumulation addresses’ surged to a 3.5-year high of 2,851,608 BTC on February 2. That amounts to around 15.32% of the total circulating supply of 18,618,081 BTC. The total number stood a little below 14% about three months ago.
The accumulation addresses are those that have at least 2 incoming non-dust transfers which are tiny amounts of bitcoins and have never spent the funds. The metric excludes addresses that are active over seven years ago to adjust for the lost coins and those that belong to the exchanges and miners.
Bitcoin: Balance held in accumulation addresses Source: Glassnode
The balance that is locked in accumulation addresses has surged by 22% year-on-year and has increased by around 80,000 BTC in the last week alone.
Notably, continued locking up of bitcoin has been developing a sell-side liquidity shortage spearheaded by an increased number of institutional buyers and has helped underpin the recent bull run.
The other on-chain metrics also support the bullish picture. For example, the total number of coins held in the exchange addresses continues to drop, taking more sell-side liquidity off the bitcoin market. The balance held on crypto exchanges dropped to a 2.5-year low of 2,349,040 BTC on February 1.
Bitcoin daily chart Source: TradingView
The flagship crypto is currently trading above $36,200, representing a 1.86% gain on the day. It broke out of a 3-week descending channel with a 6% surge on Tuesday.
Many analysts think that the breakout suggests that the recent pullback has come to an end and the bull run may resume soon.
