Although Bitcoin has recently struggled to challenge the $100,000 mark, Bitwise's Head of Research for Europe, André Dragosch, shared data today indicating that the non-liquid supply of Bitcoin has reached a historic high, while exchange balances have hit a multi-year low. The increasing scarcity of Bitcoin in the market suggests that rising demand could be bullish for Bitcoin's future.
Bitcoin surged strongly after Trump's victory last month, reaching a high of $99,588 on the 22nd of last month, 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 quoted at $95,383, amidst intense battles between bulls and bears.
Despite Bitcoin's recent struggle to challenge the $100,000 mark, Bitwise's Head of Research for Europe, André Dragosch, pointed out today that the non-liquid supply of Bitcoin has reached a historic 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 classified as 'non-liquid,' with the remaining supply on exchanges accounting for less than 14%. This means that the scarcity of Bitcoin supply is continuing to intensify.
Coinglass data shows that as of the 1st, the total balance of Bitcoin across all exchanges has dropped to just 2.27 million, marking a multi-year low.
As the liquidity of Bitcoin on exchanges continues to decrease, Microstrategy has significantly increased its holdings by 100,000 Bitcoins in the past 10 days, raising its Bitcoin position from 280,000 to 387,600. This operation further reduces the circulating supply of Bitcoin in the market.
As more enterprises begin to emulate Microstrategy's model by raising funds through convertible bonds, new stock issues, or bank loans to purchase Bitcoin and hold it as a long-term asset on their balance sheets, coupled with the ongoing net inflow growth of Bitcoin spot ETFs, institutional funds are pouring in on a large scale, further intensifying the supply tension in the market.
This raises a thought-provoking question: can the market continue to meet the massive demand from these enterprises and institutional clients, especially as exchange balances continue to decline? If the Bitcoin balance on exchanges continues to drop to lower levels, even reaching a state of liquidity exhaustion, will the price of Bitcoin experience more severe fluctuations or even rise to a new historic high?
In the face of market uncertainty, investors may need to prepare psychologically for potential high volatility, closely monitoring exchange balances, net inflows into Bitcoin spot ETFs, and institutional purchasing dynamics, as these indicators could become key signals for predicting Bitcoin's price movements.
CryptoQuant is optimistic that Bitcoin has more room for growth.
In response to the recent fluctuations in Bitcoin, CryptoQuant recently released a report stating that the recent pullback is merely a temporary setback on Bitcoin's path to breaking the $100,000 mark. Ultimately, Bitcoin will break through $100,000, and regarding its peak valuation in this bull market, CryptoQuant believes it will reach a target of at least $147,000.
