Despite Bitcoin's recent inability to challenge the $100,000 mark, Bitwise Europe's 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 lead to a bullish outlook for Bitcoin. (Background: A shift in altcoin season logic? CryptoQuant CEO: No longer relying on Bitcoin rotation, stablecoins become a driving force) (Context: Contradicting himself? Rich Dad warns Bitcoin could drop to $60,000, but just two days ago predicted BTC would soon break $100,000) Bitcoin surged strongly after Trump's victory last month, reaching a high 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 been fluctuating within the range of $95,000 to $98,000, currently reported at $95,383, amid intense market battles. Does the new low in Bitcoin exchange balances suggest a bullish outlook? Despite Bitcoin's recent inability to challenge the $100,000 mark, Bitwise Europe's 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 deemed 'illiquid', with less than 14% remaining on exchanges, indicating that the scarcity of Bitcoin's supply continues 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 has dwindled to just 2.27 million coins, marking a new low in years. While liquidity in Bitcoin on exchanges continues to decrease, Microstrategy has significantly increased its holdings by 100,000 Bitcoins in the past 10 days, raising its Bitcoin holdings from 280,000 to 387,600 coins. 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 issuance, or bank loans to purchase Bitcoin and hold it as a long-term asset on their balance sheets, coupled with a sustained net inflow growth of Bitcoin spot ETFs, institutional capital is flooding in, further intensifying the supply crunch in the market. This raises a thought-provoking question: in light of the declining exchange balances, will the market continue to meet the large-scale demands of these enterprises and institutional entities? If the Bitcoin balances on exchanges continue to drop to lower levels, even facing liquidity exhaustion, will the price of Bitcoin experience more extreme volatility, 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, net inflows into Bitcoin spot ETFs, and institutional purchasing dynamics, as these indicators may serve as key signals for predicting Bitcoin 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 temporary setback on Bitcoin's path to the $100,000 milestone, and that Bitcoin will ultimately break through $100,000. For the peak valuation of Bitcoin in this bull market, CryptoQuant believes it will reach a target of at least $147,000. Related Reports VanEck Report: Why Bitcoin is expected to rise to $180,000 this cycle? Michael Saylor presents to Microsoft's board: Use Bitcoin instead of traditional stock distribution and buyback strategies (with full video) Financial Supervisory Commission opens up "Financial Industry Custody of Bitcoin": 5 banks have expressed interest, applications will be accepted starting New Year's Day. "Signal of a surge? Bitwise: Bitcoin exchange balances hit multi-year lows, illiquid supply reaches new highs" This article was first published in BlockTempo (the most influential blockchain news media).

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