The recent increase in Bitcoin's active supply over the past 180 days raises questions about the potential onset of selling. Analysts indicate that previously dormant coins are now being activated.
What Does the Supply Increase Imply?
The recent rise in Bitcoin's supply activity suggests that coins are being distributed across various addresses, often a precursor to profit-taking, as indicated by analyst Axel Adler Jr. from CryptoQuant.
Distribution Phase of Bitcoin
The modest increase in active supply signals the beginning of a cyclical process. If Bitcoin's price continues to maintain its strength, this could lead to an active supply rate of 8-10%, potentially reaching previous activity heights.
The Future of Bitcoin
Despite the current supply activity being lower than in past cycles, it does not indicate that sellers are hastily liquidating their holdings. Price stability and a high market cap provide a solid foundation for future price fluctuations.
The ongoing analysis of Bitcoin's active supply and price dynamics suggests that while immediate selling pressure is not overwhelming, market conditions could shift as key price thresholds are approached.
