According to Glassnode, the Bitcoin market is experiencing a noticeable decline. The reduction in active supply and exchange inflows points to decreased trading activity.
Decrease in Bitcoin's Active Supply
Glassnode's latest analytics reveal that Bitcoin's active supply, also known as Hot Supply, has decreased from 5.9% to 2.8% of the overall circulating supply. This measure includes coins aged 7 days or less. Over the past three months, there has been up to a 50% reduction in hot supply, indicating a significant drop in $BTC liquidity available for trade.
Reduction in Bitcoin Exchange Inflows
Another significant indicator is the reduction in Bitcoin inflows to exchanges, which have declined from 58.6K $BTC to just 26.9K $BTC daily, representing a 54% decrease. This may indicate a reduced risk appetite among investors under market uncertainties and macroeconomic conditions.
Market Impact and Possible Outlook
The decrease in active supply and inflows to exchanges is typically associated with expectations of significant price increases. Currently, Bitcoin supply dynamics could contribute to establishing a relatively stable price base in the short term. Investors seem to be moving towards holding $BTC rather than actively trading, potentially strengthening market positions.
The overall decline in Bitcoin market activity might set the stage for future price changes. Analysts continue to monitor the dynamics, anticipating shifts in investor behavior.
