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The overall quantity of Bitcoin available for sale, referred to as sell-side liquidity inventory, has fallen to its lowest point since October 2020, as reported by on-chain analysis firm CryptoQuant.
According to the firm’s data, merely 3.397 million Bitcoins are on offer across exchanges, miners, OTC desks, and GBTC. This marks a significant reduction in sell-side liquidity, which has decreased by 678,000 BTC just in 2024. The diminishing supply lessens potential selling pressure, resulting in a tighter market as demand continues to rise.
Liquidity Crunch
Demand for Bitcoin has remained in “expansion territory” since late September, with noticeable demand increasing at a monthly rate of 228,000 Bitcoin.
CryptoQuant indicates that accumulator addresses—wallets that consistently purchase Bitcoin without ever selling—are augmenting their holdings at an unprecedented rate of 495,000 Bitcoin per month.
These accumulators have emerged as a significant force in the market, contributing to the liquidity crunch as more Bitcoin is removed from circulation. This surge in demand has assisted in driving Bitcoin’s price to a record high of $108,000 this month, according to analysts.
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Market Cap of USD-Based Stablecoins Rises to $200B
As Bitcoin’s supply tightens, liquidity in the wider crypto market continues to grow. The total market capitalization of USD-based stablecoins, including Tether and USD Coin, has risen to $200 billion. This signifies a $35 billion increase, or 20%, since late October, as reported by CryptoQuant.
The expansion in stablecoin supply indicates that new capital is entering the crypto market, which could potentially drive further price increases for Bitcoin and other cryptocurrencies.
Bitcoin Price Action
On Friday, the crypto market experienced a significant disruption with over $1 billion in leveraged positions liquidated within a 24-hour period. Bitcoin fell more than 8%, trading below $96,000.
Bitcoin had sustained strong momentum over the previous 30 days but has now dipped below the crucial $100,000 psychological threshold following the Federal Reserve’s indication of a more hawkish approach.
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