- The illiquid supply of BTC has continuously increased in the second quarter of 2023, revealing an opposite relationship with price.
- BTC’s latest pump to 30,000 caused a dramatic shift in investor sentiment.
From Bitcoin [BTC] Slow growth over the past month coupled with legal actions against top exchanges significantly reduced investors’ appetite to trade. As FUD flooded the market, most long-term investors began withdrawing coins from exchanges in favor of self-custody.
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According to the on-chain analytics company Glasnoderevealed a fascinating difference between supply on exchanges (ie liquid supply) and supply in illiquid portfolios with no history of spending. While the exchange rate balance fell to 2.3 million, the lowest since early 2018, illiquid supply reached a new all-time high of 15.2 million.
Source: Glassnode
BTC available for trading is falling
The illiquid supply of BTC has continuously increased in the second quarter of 2023 as shown below, revealing an inverse relationship with the price of BTC. It was interesting to note that the illiquid supply equaled more than 78% of the total circulating supply of BTC, indicating a clear rise in HODLing sentiment.
Source: Glassnode
This trend could be explained by the fact that Bitcoin was increasingly viewed as a ‘Store of Value’ rather than a speculative asset in intraday trading, lending credence to its long-held narrative of being a safe haven.
Will sentiment change?
After prolonged periods of price movement, BTC crossed the $30,000 mark at press time, the first time since mid-April, according to CoinMarketCap. According to blockchain analytics firm Santiment, this caused a dramatic shift in investor behavior as BTC whales awoke from their slumber to clock their highest number of transactions in more than three months.
#Bitcoin‘s whale trades hit the highest hour in more than 3 months, when 259 trades worth more than $1 million took place on the $BTC network just 2 hours after the price crossed $30.6k. Volume should likely continue to increase to warrant more growth. https://t.co/N5jkXCws6R pic.twitter.com/DrFo4avE0a
— Santiment (@santimentfeed) June 21, 2023
Investor sentiment for the king coin also turned to greed for the first time since May. Market sentiment has been neutral in recent weeks due to low volatility, which disappointed both bullish and bearish forces.
Bitcoin Fear and Greed Index is 65. Greed
Current price: $30,038 pic.twitter.com/z8bSUXetNQ— Bitcoin Fear and Greed Index (@BitcoinFear) June 22, 2023
How much are 1,10,100 BTC worth today?
Central bank approval?
The recent admission by Federal Reserve Chairman Jerome Powell that BTC and the crypto asset class “appears to have some staying power” boosted the price increase.
Powell made the comments during a to belong on monetary policy by the House Financial Services Committee. The chairman also said: “We do indeed see payment stablecoins as a form of money”.