Bitcoin’s accumulator addresses have seen a significant increase in demand in December, with 225,280 BTC in net acquisitions by investors as of Dec. 23, marking an 82.6% monthly increase. On the flip side, total sell-side liquidity, which refers to the amount of Bitcoin available for selling on exchanges and exchange-traded funds, decreased by about 590,000 BTC during the same period. Particularly, there was a substantial drop in selling pressure between Dec. 22 and Dec. 23, with the amount of Bitcoin ready for selling falling by 520,000 BTC.
The report highlights that supply on over-the-counter (OTC) trading desks has also decreased, from over 421,000 BTC to 403,000 BTC. These numbers suggest that investor demand is likely to continue to absorb sell pressure. Additionally, the liquidity inventory ratio, which measures how quickly current supply can meet investors’ demand, dropped from 12 months to 5.5 months in December. Data from CryptoQuant also indicates that Bitcoin whales, addresses holding more than 1,000 BTC, sold nearly 8,600 BTC this month as of Dec. 23. However, new investors are stepping in to absorb this supply, with the number of short-term holders increasing by 3% over the past week.
Despite seeing a correction of up to 14.2% from its all-time high of over $108,000 on Dec. 17, Bitcoin is poised to bounce back and resume its upward trajectory according to analysts’ predictions. However, caution is advised by CryptoQuant community analyst Onatt, as the supply of Tether USD (USDT) on exchanges is decreasing while the supply of BTC is slightly increasing. While this may not necessarily indicate a prolonged bearish period, it could hint at the potential for further downside in the near future.
Overall, the data suggests that there is strong demand from investors for Bitcoin, with accumulator addresses acquiring a significant amount of BTC and new investors entering the market. The decrease in sell-side liquidity and OTC supply indicates that there is a limited amount of Bitcoin available for selling, which could help support the price. Despite a short-term correction, Bitcoin is expected to recover and continue its bullish trend, although caution is advised due to potential downside risks. Investors should closely monitor the supply of USDT and BTC on exchanges for further insights into market dynamics and potential price movements in the coming days.
