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Inadequate Supply Of Bitcoin Keeps Rising Despite Price Correction – Here’s Key Metrics On Chain To Look At

  • The illiquid supply of Bitcoin has increased dramatically, suggesting a strong construction in this price correction.
  • Goldman Sachs believes that Bitcoin will continue to climb to the $ 100,000 levels, further consuming the gold market share.

The world’s largest cryptocurrency, Bitcoin, has been moving sideways over the past few weeks with a very exciting end to 2021. At press time, Bitcoin is still trading below $ 47,000 and its market dominance drops by 40%.

While Bitcoin’s price action is not entirely favorable, its chain metrics continue to show strength. One of the key indicators is the illiquid supply of Bitcoin, which has been accelerating recently. According to chain data provider Glassnode, almost 76% of Bitcoin in circulation is now illiquid. This clearly indicates that there are strong signs of accumulation during the recent BTC price declines. In one of his most recent reports, Glassnode states:

We can see that during the last months of 2021, even as prices corrected, currencies accelerated from liquid to illiquid portfolios. Until December, the coins were transferred to an increasingly illiquid wallet at a rate of between 50k and 100k BTC / month, indicating a higher probability of a wider accumulation.

Courtesy: Glassnode

This is clearly an encouraging sign that Bitcoin investors are willing to buy and HODL even during these test times.

Non-zero Bitcoin addresses on the rise

Another important metric is the growing number of Bitcoin wallet addresses with non-zero balance. This metric helps us estimate the long-term demand for cryptocurrencies. Glassnode explains:

Over the past year, a net total of 7,462 million non-zero balance portfolios were added to the network, representing a year-on-year growth of 23.2%. Of these, 1,415 million were added from the October HTA, 18.9% of the annual total.

Currently, the non-zero Bitcoin launches have reached a high of 39.6 million, which is 40% more than the peak of the bull run in 2017. This shows that the growth of the user base has been maintained over the five-year period.

Courtesy: Glassnode

Goldman Sachs: Possibility remains $ 100,000 Bitcoin

In one of its recent reports, Wall Street banking giant Goldman Sachs claimed that Bitcoin still has the full potential to touch the $ 100,000 levels. It also says that Bitcoin will take market share from gold amid growing adoption. As Bloomberg reported:

Goldman estimates that Bitcoin-adapted market capitalization has a float of just under $ 700 billion. This figure represents 20% of the “value store” market, which consists of Bitcoin and gold. The value of gold available for investment is estimated at $ 2.6 trillion.

So, if Bitcoin’s share as a «hypothetically» value store rises more than 50%, its price would rise to $ 100,000 with an annual compound yield of 17-18%. In addition, based on technical indicators, Bloomberg notes that the correction of bitcoin volatility low volatility prices may be coming to an end. Notes:

Bitcoin has been floating in the $ 45,000- $ 51,000 range for a month, but may be on the rise again. The cryptocurrency’s historical 30-day volatility is at its lowest point since September, and the price is showing signs of short-term depletion.

The so-called Demark Sequential indicator is showing a ‘9-13-9’ pattern just above the $ 43,295-44,500 support zone, defined by 61.8%. Fibonacci quit the entire June-November Bitcoin rally with previous Demark support.

Esdras Collins

Esdras Collins is an early investor in bitcoin and a veteran trader in the cryptocurrency and foreign exchange markets. He is fascinated by the complex possibilities of blockchain technology and is committed to making the subject accessible to all. His reports focus on the development of various cryptocurrency technologies.

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