Despite Bitcoin's recent struggle to challenge the $100,000 mark, Bitwise's European research director André Dragosch shared data today indicating that Bitcoin's illiquid supply has reached an all-time high, while exchange balances have hit a multi-year low. The increasing scarcity of Bitcoin in the market suggests that rising demand may be bullish for Bitcoin in the future. (Background: Changing logic of altcoin season? CryptoQuant CEO: No longer relying on Bitcoin rotation, stablecoins as a driving force) (Additional context: Contradicting himself? Rich Dad warns Bitcoin could drop to $60,000, but just two days ago suggested BTC would soon break $100,000) Bitcoin surged strongly after Trump's election last month, reaching a peak of $99,588 on the 22nd, but subsequently failed to challenge the $100,000 mark, dropping back to $90,791 on the 26th. In recent days, it has oscillated between $95,000 and $98,000, currently reporting at $95,383, with intense battles between bulls and bears. Does the new low in Bitcoin exchange balances suggest a bullish outlook? Despite Bitcoin's recent struggle to challenge the $100,000 mark, Bitwise's European research director André Dragosch tweeted today that Bitcoin's illiquid supply has reached an all-time high, while exchange balances have hit a multi-year low. The increasing scarcity of Bitcoin in the market suggests that rising demand may have a bullish impact on Bitcoin: Nearly 75% of the supply is considered 'illiquid', while less than 14% of the supply remains on exchanges, indicating that Bitcoin's supply scarcity is continuing to intensify. GM from Europe Bitcoin's illiquid supply has reached a new all-time high while exchange balances hit a new multi-year low… Almost 75% of supply is deemed 'illiquid' while less than 14% of supply remains on exchanges… Bitcoin's supply scarcity continues to intensify. pic.twitter.com/beSASSuyK2 — André Dragosch, PhD | Bitcoin & Macro (@Andre_Dragosch) December 2, 2024 Coinglass data shows that as of the 1st, the total Bitcoin balance across exchanges in the market stands at just 2.27 million, marking a new multi-year low. While Bitcoin liquidity on exchanges continues to decrease, in the past 10 days, Microstrategy significantly increased its holdings by acquiring 100,000 Bitcoins, raising its Bitcoin position from 280,000 to 387,600. This move further reduces the circulating supply of Bitcoin in the market. As more companies begin to emulate Microstrategy's model by raising funds through convertible bonds, new stock, or bank loans to purchase Bitcoin and hold it as long-term assets on their balance sheets, coupled with the continuous net inflow growth of Bitcoin spot ETFs, institutional funds are pouring in on a large scale, further exacerbating the supply crunch in the market. This raises a thought-provoking question: can the market continue to meet the massive demands of these enterprises and institutional investors given the declining exchange balances? If Bitcoin balances on exchanges continue to drop to lower levels, or even face liquidity exhaustion, will Bitcoin's price experience more severe fluctuations, potentially pushing it to even higher historical peaks? In the face of market uncertainty, investors may need to prepare psychologically for potential high volatility and closely monitor exchange balances, Bitcoin spot ETF net inflows, and institutional purchasing dynamics, as these indicators may become key signals for predicting Bitcoin's price trends. CryptoQuant is optimistic about Bitcoin having more room for upward movement Regarding the recent fluctuations in Bitcoin, CryptoQuant recently released a report stating that the recent pullback is merely a brief setback encountered on Bitcoin's path to breach the $100,000 mark, and Bitcoin will ultimately break through $100,000. As for Bitcoin's peak valuation in this bull market, CryptoQuant believes it will reach at least a target of $147,000. Related reports VanEck report: Why this cycle Bitcoin is expected to rise to $180,000? Michael Saylor briefs Microsoft's board: Use Bitcoin to replace traditional stock distributions and buyback strategies (full video included) The Financial Supervisory Commission opens up 'financial institutions to custody Bitcoin': 5 banks have expressed interest, applications to be accepted starting New Year's Day 'Sign of a surge? Bitwise: Bitcoin exchange balances hit multi-year low, illiquid supply hits new high' This article was first published by BlockTempo (the most influential blockchain news media).

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