Bitcoin Supply Trends Signal Potential for Growth Amid Exchange Outflows
Bitcoin (BTC) balances on exchanges have plummeted to their lowest point in nearly four years, reflecting a notable surge in investor demand. Meanwhile, a substantial sell wall—worth $384 million—remains in place as a hurdle between current prices and bitcoin’s much-anticipated $100,000 milestone. Despite this, on-chain data suggests mounting pressure for a breakout to the upside.
Rising Illiquid Supply Highlights Holding Behavior
“Illiquid supply” represents bitcoin held by long-term investors (LTHs) that is not actively traded. Glassnode data indicates that over the past 30 days, the illiquid supply of bitcoin has grown by 185,000 BTC, pushing the total to an all-time high of 14.8 million BTC. This figure accounts for 75% of bitcoin’s circulating supply of just under 20 million (out of a fixed maximum of 21 million).
This rise in illiquid supply marks the second-highest monthly increase in 2023 and signals a clear trend among investors: accumulating rather than selling. CoinDesk’s analysis corroborates this, showing that since November 26, LTHs have added more than 2,000 BTC to their holdings, signaling a slowdown in profit-taking. This shift could alleviate selling pressure and bolster market sentiment for upward movement.
Tokens Flow Out of Exchanges
In tandem with the rise in illiquid supply, bitcoin is rapidly leaving exchanges—a trend that has accelerated since the beginning of November’s bull run. This marks the conclusion of a two-year phase of relatively stable exchange balances, signaling heightened interest from investors looking to hold rather than trade.
However, a broader five-year perspective reveals that exchange balances have remained relatively consistent within a range of 2.7 million to 3.3 million BTC. For the current rally to evolve into a long-term bull market, sustained outflows from exchanges are essential. This would signify robust organic demand rather than leveraged buying through derivatives, which often leads to short-lived price movements.
Conclusion
With bitcoin supply becoming increasingly concentrated among long-term holders and exchange balances shrinking, market dynamics are shifting toward a more accumulation-driven phase. These trends could be pivotal in driving sustained upward momentum and overcoming resistance at the $100,000 level.
