Rising demand for bitcoin
During December, there was a significant increase in bitcoin purchases by investors with accumulation wallets, who increased their purchases by 82.6%, adding more than 225,000 BTC to their portfolios. Despite rising demand and a reduction in available supply, the market remains nervous due to the correction and declining liquidity. This shift in investor behavior in the cryptocurrency market, particularly for bitcoin, is very notable.
Data from CryptoQuant shows an 82.6% monthly increase in purchases by these wallet addresses as of December 23. During this period, investors added approximately 225,280 bitcoins to their portfolios. Investor demand effectively absorbed available supply, which was reflected in a sharp drop in the number of bitcoins ready for sale, which fell by 520,000 BTC between December 22 and 23.
The decline in selling pressure is also evident in the OTC market, where supply has fallen from over 421,000 BTC to 403,000 BTC. The liquidity inventory ratio, which measures how quickly supply meets demand, fell from 12 months to 5.5 months in December. These figures suggest that investor demand is effectively absorbing the available supply on the sell side.Investors with wallets containing more than 1,000 BTC, known as bitcoin whales, on the other hand, have been selling, disposing of nearly 8,600 BTC as of December 23. This trend shows that nervousness and caution are present in the market despite growing demand, with the number of short-term bitcoin holders increasing by 3% over the past week, with these holders accumulating 641,789 BTC over the past year. This brings them close to their all-time high of 3.81 million BTC, just 70,000 bitcoins short of that mark. Despite these bullish indicators, however, the market remains nervous, especially after a 14.2% correction after reaching over $108,000 on December 17.Analysts are advising investors to exercise caution as the supply of USD Tether (USDT) on exchanges is declining, while the supply of BTC is increasing slightly. This decrease in liquidity may have negative effects on the market and contribute to further price fluctuations.
In the long term, demand for bitcoin is expected to continue to grow, which should lead to a further decrease in available supply and an increase in price. However, investors should be prepared for potential risks and market fluctuations that may be caused by both internal and external factors. This includes changes in regulations, technological innovation and macroeconomic trends.
Investments in bitcoin and other cryptocurrencies should be carefully considered and managed in light of their volatility and potential risks. At this time, it is important to monitor market signals and respond to them with caution and a strategic approach. While blockchain technology and cryptocurrencies represent significant innovations, it is important to be prepared for their dynamic and sometimes unpredictable evolution.The cryptocurrency market, and bitcoin in particular, is going through a period of significant change and adaptation to new conditions. Investors with accumulating wallets are showing their confidence in the long-term potential of bitcoin, but market jitters and declining liquidity suggest the need for caution and careful monitoring of future developments.
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