An analyst stated, “The market appears to be in a period of quiet accumulation, which suggests a subcurrent of demand.”
Bitcoin (BTC) is entering purses controlled by illiquid entities, or network participants with little to no spending history, at the quickest rate in the past six months, indicating a preference for accumulation by long-term investors.
Glassnode’s illiquid supply change metric, which compares the number of coins held by illiquid wallets on a specific date to the same day the previous month, reached its highest level since December 19 on Monday, reaching 147,351.58 BTC ($3.9 billion). The sum held by illiquid entities has reached a record high of 15,207,843 BTC, with a 215,000 BTC increase in the past four weeks alone.
Despite sustained macroeconomic uncertainty and elevated regulatory risks, the data indicates that investors remain optimistic about bitcoin’s price prospects.
The U.S. Federal Reserve left interest rates unchanged last week, suspending a 15-month cycle of rate hikes. However, the bank ruled out rate reduction this year while leaving the door open for additional rate increases if necessary. The so-called restraint contributed to the decline of the cryptocurrency market last year.
The U.S. Securities and Exchange Commission filed lawsuits against prominent digital asset exchanges Coinbase and Binance at the beginning of this month, alleging them of offering unregistered alternative cryptocurrencies as securities. The absence of bitcoin from the litigation prompted a rotation of funds away from altcoins and into the most valuable cryptocurrency by market capitalization.
In a weekly report published on Monday, Glassnode analyst James Check stated that the rate of flow into illiquid wallets “supports the case for a gradual and steady accumulation,” citing the record balance held by illiquid entities and the diminishing exchange balance.
“Overall, the market appears to be in a period of quiet accumulation, indicating a subcurrent of demand,” Check added.
The illiquid supply change indicator became positive on May 24, indicating a resumption of accumulation, and has since risen sharply.
If all other factors remain constant, a speedier rate of accumulation implies a diminished market supply and the possibility of a price increase. As long as key support at $25,200 remains intact, i.e., as long as the bitcoin price does not fall below that level, technical charts imply the possibility of a bullish resurgence.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
