The data shows that because long-term holders have not yet begun to realize too much profit, the recent supply of Bitcoin is relatively lacking in liquidity.
The last move of Bitcoin supply in 30 days is relatively low
According to the latest weekly report Arcane Research, Although the price of BTC has risen recently, the supply has not increased much in the past 30 days.
The percentage of Bitcoin supply last moved in the past 30 days is an important indicator that tells us the liquidity of the market.
Generally, when coins begin to age, they become less likely to be moved.Because of this, the ratio is very low Short-term supply Means low market liquidity. This may be a bullish sign for BTC.
On the other hand, if a large part of Bitcoin’s supply is young, then liquidity will be high. This may be a sign of a bearish trend.
Based on the trend of the indicator, it may be possible to judge whether the market is close to the peak. This is a chart showing how the value of BTC’s young supply has changed since 2017:
Looks like the current percentage of supply moved in the last thirty days is relatively low | Source: The Arcane Research Weekly Update - Week 44
The above chart shows some interesting characteristics between the indicator and the Bitcoin price during the two bull markets in 2017 and 2018.
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In 2017, whenever the short-term supply peaked, the price of cryptocurrencies also peaked. But this trend will not be established in 2021, because the only sharp spike in the indicator is followed by a strong bull market that lasted for three months.
When Bitcoin broke through 2017’s all-time high, this year’s short-term supply surged sharply. Long-term holders then began to sell, increasing liquidity.
In the following months, the demand for coins only increased, but the supply shock became too great. Soon after, prices began to fall.
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At present, the short-term supply remains at a healthy level of 10%, which means that it still has enough room for growth, even though it has already achieved New ATHThis means that if the strength of Bitcoin remains the same, the market can still grow before reaching its peak.
At the time of writing, Bitcoin price Floating around US$68,200, it has risen by 10% in the past 7 days. In the past month, the value of cryptocurrencies has risen by 18%.
The chart below shows the trend of token prices over the past five days.
BTC's price has made a new ATH above the $68k mark | Source: BTCUSD on TradingVIew
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research