Blockchain analysis platform Glassnode shared some important insights into Bitcoin’s liquidity levels amid a somewhat volatile market period. Notably, the leading cryptocurrency struggled to maintain its “Uptober” shape after a price surge to $126,000 was followed by a major correction to below $105,000. While Bitcoin has shown some recovery activity since then, it has yet to break the $115,000 resistance level, while its total monthly gain stands at 0.47%.
Bitcoin liquidity rises and demand strength is tested
in Share X On October 25, Glassnode reported that the illiquid supply of Bitcoin had fallen by 62,000 BTC since mid-October. For context, Illquid Bitcoin refers to BTC held in wallets with little or no selling history. They are essentially coins that are unlikely to move because their holders rarely spend and are considered out of the market.
Therefore, a decline in illiquid Bitcoin indicates the return of more coins to active circulation, increasing the available supply. This dynamic can make sustained price growth more difficult unless matched by a strong rise in demand.
Glassnode explains that growth in illiquid supply was a positive catalyst this market cycle before this recent decline occurred. Historically, similar pullbacks, such as the 400,000 BTC drop in January 2024, have tended to slow market momentum by increasing the amount of active BTC in circulation.
Who is behind the sale?
In analyzing this decline in illiquid Bitcoin, Glassnode also discovered that Bitcoin whale accumulation activity has accelerated. In particular, Bitcoin wallets have increased their holdings over the past 30 days and have yet to liquidate any large positions since October 15.
Therefore, the rise in Bitcoin liquidity has been driven by retail investors. More data from Glassnode reveals that wallets holding between 0.1 and 10 BTC, i.e. $10,000 to $1,000,000, produce significant and consistent outflows. In particular, this group of traders has been steadily reducing their exposure to Bitcoin since November 2024.
Regarding the recent price action, Glassnode analysts noted that momentum buyers, especially retail investors, are increasingly exiting the market. Although low buyers, i.e. whales, have intensified their activity, their demand has not been sufficient to absorb the excess supply, leading to the price imbalance currently observed.
At the time of writing, Bitcoin is trading at $111,570, reflecting a modest gain of 0.89% over the past 24 hours. On higher time frames, the leading cryptocurrency registered a 4.11% increase over the past week and a marginal rise of 0.05% over the past month.
Featured image from Flickr, chart from Tradingview
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