Bitcoin’s Hot Supply Cools Off: Is a Price Explosion Next?

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Ah, Bitcoin. The digital currency that’s more volatile than my mood after a double espresso. According to the so-called “experts,” a price breakout is imminent. Why? Because Bitcoin’s “hot supply” metric has dropped by more than half in the last three months. From 5.9% to 2.8%. That’s like going from a roaring bonfire to a sad little tea candle. 🕯️

Bitcoin’s Potential Supply Squeeze and Market Impact

For those of you who don’t speak crypto-nerd, “hot supply” refers to Bitcoin that’s been moved or transacted within the last seven days. Think of it as the cryptocurrency equivalent of a restless teenager who can’t sit still. But now, it seems Bitcoin holders are finally learning to chill. 🧘‍♂️

Glassnode, the self-proclaimed oracle of all things blockchain, shared an update that Bitcoin’s circulating supply has fallen by over 50%. Translation: people are hoarding their Bitcoin like it’s the last roll of toilet paper in a pandemic. 🧻

#Bitcoin’s Hot Supply metric, which tracks coins aged ≤1 week, has contracted from 5.9% to 2.8% of circulating supply – a 50%+ decline over the past 3 months. This signals a sharp reduction in liquid $BTC available for trade:

— glassnode (@glassnode) March 20, 2025

So, what does this mean? Well, traders are holding onto their Bitcoin instead of selling it. This is significant because Bitcoin’s price has been as stagnant as a pond in summer. It’s like everyone’s decided to wait out the downturn, betting on a price increase. Because, you know, patience is a virtue. Or so they say. 🎰

But here’s the kicker: a drop in hot supply could mean market liquidity is tightening. In other words, buying large amounts of Bitcoin might become as difficult as finding a decent avocado at the supermarket. 🥑

And if that’s not enough, it could also signal a potential supply squeeze. Analysts say this might push prices higher, whether demand remains steady or increases. Because nothing says “chaos” like a good old-fashioned supply squeeze. 🚀

Bitcoin’s Price Action and Market Sentiment

Historically, a decline in hot supply suggests that Bitcoin is being accumulated by “stronger hands” in the market. These are the long-term holders who don’t sell Bitcoin willy-nilly. So, selling pressure might be reduced. It’s like the crypto version of a zen master. 🧘‍♀️

Market observers consider this scenario bullish for Bitcoin. A shrinking liquid supply means fewer coins available for exchange transactions. And when demand outstrips supply, prices tend to go up. It’s basic economics, folks. Or, as I like to call it, “the law of supply and demand, but make it dramatic.” 📈

In the last 24 hours, Bitcoin has rallied to a high of $87,443.27 from $83,440. As of this writing, the coin is trading at $85,256.80, a 2.22% increase. Trading volume remains bullish at 59.54%, or $37.81 billion. So, it seems the crypto rollercoaster is still very much in motion. 🎢

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2025-03-20 17:50