As of December 23rd, investors with Bitcoin accumulator addresses had net acquired 225,280 BTC, indicating a significant spike in demand for Bitcoin over the month. This change indicates a monthly gain of 82.6%. However, during the same period, there was a decline of around 590,000 BTC on the total sell side.
Liquidity refers to the quantity of Bitcoin available for sale on exchanges and exchange-traded funds. It is worth mentioning that the decrease in selling pressure is linked to a sharp decrease of 520,000 BTC in the amount of Bitcoin available for sale between December 22 and December 23.
Bitcoin Supply Shrinks as Demand Grows
The article states that the supply on OTC trading desks, which handle major trades, has decreased from 421,000 BTC to 403,000 BTC. According to these numbers, investor demand will likely continue to absorb sell pressure. Another indicator of the speed with which present supply can meet investor demand, the liquidity inventory ratio, dropped from 12 months to 5.5 months in December.
As of December 23rd, it was revealed that almost 8,600 BTC have been sold by Bitcoin whales, defined as addresses owning more than 1,000 BTC. Nevertheless, this supply is being devoured by new investors; the number of short-term holders has increased by 3% in the last week alone. The total holdings of short-term holders reached 3.81 million BTC last year, up 641,789 BTC from the previous year. This is 70,000 BTC lower than the all-time high achieved on December 15th.
Bitcoin Recovery Ahead
Analysts expect Bitcoin to recover and continue its upward trend. Despite the 14.2% drop, analysts expect Bitcoin to recover and continue its upward trend. Since reaching its all-time high of almost $108,000 on December 17, community analyst Onatt cautioned investors to exercise care due to the declining quantity of Tether USD (USDT) on exchanges and the slightly increasing supply of Bitcoin. There may not be a long bearish period ahead, but this could point to more decline in the coming days.
Summary
Investors bought 225,280 BTC on December 23. This drove up demand for cryptocurrency, while the sell-side liquidity fell by 590,000 BTC. Short-term holders rose to 3.81 million BTC, even though whales sold 8,600 BTC. Despite a 14.2% drop from its December peak, analysts still see a comeback in Bitcoin. However, they warn that the Tether supply is rising. Bitcoin supply could indicate temporary losses, so investors should proceed cautiously.
FAQs
Why has Bitcoin sell-side liquidity decreased?
Sell-side liquidity fell by 590,000 BTC, driven by a sharp drop of 520,000 BTC available for sale between December 22 and 23.
How is Bitcoin's supply being affected?
The supply on OTC desks decreased from 421,000 BTC to 403,000 BTC, showing that demand is absorbing the available supply.
What is the outlook for Bitcoin's recovery?
Despite a 14.2% drop from its peak, analysts expect Bitcoin to recover, though caution is advised due to rising Tether supply.
How are short-term holders responding to the market?
Short-term holders have increased by 3%, with total holdings reaching 3.81 million BTC, showing strong investor confidence.
