Bitcoin (BTC) liquidity is drying up quickly, with the metric recently hitting a seven-year low, at around 3.12 million BTC, the lowest level since 2018. This happened as BTC continues to trade below its 99-day moving average (MA), which sits around $112,086.
Bitcoin liquidity dries up amid high demand
According to a CryptoQuant Quicktake post from contributor Arab Chain, Bitcoin sell-side liquidity is drying up at a rapid pace, recently reaching a seven-year low of 3.12 million BTC.
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With the supply of Bitcoin falling sharply, the cryptocurrency is trading in the low $110,000 range, indicating a delicate balance between declining active circulating supply and growing institutional demand.
The latest on-chain data shows that demand for Bitcoin from long-term holder addresses is steadily rising. Over the past 30 days, long-term investors have accumulated 373,700 BTC.
Long-term investors who accumulated Bitcoin during the recent decline show that there is enough market demand for the flagship cryptocurrency despite the volatile cryptocurrency market. The Arabian Series noted that the market is currently going through a “quiet accumulation” phase before a potential breakout.
A CryptoQuant analyst confirmed that the Liquidity Inventory Ratio (LIR) has collapsed to around 8.3 months, indicating that current market liquidity covers less than nine months of demand – confirming the rapid depletion in the sellable supply of BTC.
For starters, LIR measures the balance between available liquidity and active trading demand in a market, showing whether market makers are offering sufficient depth compared to recent trade volume. A high LIR indicates abundant liquidity and stable price action, while a low LIR indicates weaker order books and increased exposure to volatility or slippage.
The medium-term outlook for BTC looks bullish, due to a combination of declining liquidity and growing demand from institutional and long-term investors. The Arabic series added:
If this trend continues until the end of the fourth quarter, the price of Bitcoin may exceed $115,000, especially if it is accompanied by a rise in purchasing flows from American investment funds and ETFs, which supports the continuation of the current upward trend.
The highest BTC has not yet arrived
While some analysts expect that BTC may be It has already peaked In this market cycle, there are others who are confident that the top cryptocurrency has not yet reached its highest levels. Latest data on the chain Pointing The BTC NVT Golden Cross has not yet entered the area that marked the highs of the previous session.
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Likewise, fellow CryptoQuant analyst PelinayPA anticipation There is a 55% chance that Bitcoin has not yet reached the top of the current market cycle. At press time, Bitcoin is trading at $111,295, up 2.1% over the past 24 hours.
Featured image from Unsplash, charts from CryptoQuant and TradingView.com
The post Bitcoin Liquidity Hits Seven-Year Low As Accumulators Stack 373,700 BTC In A Month first appeared on Investorempires.com.
