CryptoQuant: Bitcoin Demand 'Swallows' Available Supply! Reasons Revealed

As demand continues to rise, industry liquidity is also increasing. The total market capitalization of stablecoins denominated in US dollars recently surpassed $20 billion for the first time, growing by 20% since the end of October, or $3.5 billion. This reflects the liquidity in the cryptocurrency market and the influx of new capital. This growth also coincides with BTC rising above $100,000 to $108,000. According to data from CoinMarketCap, the value of this crypto asset is $96,700 at the time of writing.

In addition, Bitcoin seller liquidity is currently hovering around 3.397 million BTC, marking the lowest level in over four years. So far this year, this liquidity has further shrunk by 678,000 BTC, significantly reducing the likelihood of selling pressure.

Moreover, the liquidity inventory ratio (an indicator measuring how many months of current seller inventory can meet demand) has dropped from 41 months at the beginning of October to 6.6 months. CryptoQuant explains that the decline in the seller inventory ratio aligns with the BTC rebound in the first and fourth quarters of 2024.