Bitcoin illiquid supply continues to rise despite price correction – here are the key on-chain metrics to watch
Bitcoin has moved sideways in the past few weeks, which means that 2021 did not end in a particularly exciting year. At press time, BTC is still trading below $ 47,000 and its market share has fallen below 40%.
Even if the Bitcoin price development is not exactly thrilling, the on-chain metrics continue to show strength. One of the most important indicators is the illiquid Bitcoin supply, which has been rising steadily lately. According to on-chain data provider Glassnode, nearly 76% of Bitcoin holdings are currently illiquid. This clearly indicates a strong accumulation during the recent Bitcoin price slump. In one of the last Glassnode reports it says:
“We see that in the last months of 2021, even when prices were corrected, there was an increasing transfer of coins from liquid to illiquid wallets. By December, between 50 and 100 thousand bitcoins per month were being moved to illiquid wallets, reflecting increased accumulation. “
This is an encouraging sign that even in these troubled times, Bitcoin investors are ready to buy and hold Bitcoin.
Bitcoin wallets with credit are on the rise
Another important metric is the number of Bitcoin wallet addresses with credit, which is constantly increasing. This metric helps us assess long-term demand for cryptocurrency.
“Last year, a total of 7.462 million non-zero wallets were added to the network, representing a 23.2% year-over-year growth. 1.415 million of these have been added since the ATH in October, which is 18.9% of the year-round increase. “
Goldman Sachs: BTC rate 100,000 still possible
In one of their recent reports, Goldman Sachs stated that Bitcoin still has the potential to hit the $ 100,000 mark. The bank analysts expect that Bitcoin will take market share away from gold investments in view of the increasing acceptance as an investment. Bloomberg reports the details:
“Goldman estimates the market capitalization of BTC adjusted for the market value at nearly 700 billion dollars. This corresponds to a share of 20% in the “store of value market”, which, according to Goldman Sachs, is made up of Bitcoin and gold. The value of gold available for investment is estimated at $ 2.6 trillion. “
So if Bitcoin’s share as a store of value increased more than 50%, the price would climb to $ 100,000, with an average annual return of 17-18%. Additionally, based on the technical indicators, Bloomberg states that Bitcoin’s price correction may come to an end:
“Bitcoin has been hovering around $ 45,000 to $ 51,000 for the last month or so, but it may bounce back soon. The historical 30-day volatility of the cryptocurrency is at its lowest level since September, and the price is showing short-term signs of exhaustion. The so-called Demark Sequential indicator shows a “9-13-9” pattern just above the support zone between $ 43,295 and $ 44,500 created by the 61.8% fibonacci retracement of the entire Bitcoin rally from June to November and the prior Demark support is defined. “