Cryptocurrency exchange Bitfinex stated in a report released on Monday that while Bitcoin may still experience a deeper correction in the first quarter of 2025, the broader supply tightening and bullish sentiment among miners suggest that Bitcoin still has further upside potential in the medium term.
Bitfinex's report indicates that the selling liquidity of Bitcoin is rapidly diminishing, with the Liquidity Inventory Ratio (tracking the time current supply meets demand) significantly dropping from 41 months in October to just 6.6 months. This notable decline aligns with the rebound observed in the first and fourth quarters of 2024, showing that available liquidity tightens during periods of strong market activity.
Source: Bitfinex
The report also noted that as important sellers during the Bitcoin halving, the amount of Bitcoin miners are transferring to exchanges has decreased since April 2024. Although there was a slightly lower peak in inflows in November, since then, the pace at which miners are taking profits has significantly slowed.
The Bitfinex report stated: "In summary, miners are currently in a profitable state, and the generally bullish market trend allows them to operate more easily. Therefore, they mostly choose to hold BTC rather than sell. Additionally, the miners' Net Unrealized Profit/Loss (NUPL) remains very positive at around 0.5, indicating that miners are still in a strong position with significant unrealized profits, tending to hold BTC at this stage."
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