Bitcoin

<h2 id="quick-take">Quick Take</h2> 
The Bitcoin market is currently witnessing pivotal changes in its liquidity dynamics. With the illiquid supply reaching an all-time high at 15.3 million BTC, representing approximately 78% of the Bitcoin circulating supply, it suggests a growing pool of holders committed to their long-term Bitcoin investments. 
Concurrently, the liquid supply has retraced to 2012 levels at 1.3 million BTC. This decreasing trend implies a potential shift in the market’s operating behavior, with more entities transitioning to longer-term holding strategies, thus joining the ranks of the ‘illiquid entities’. 
Furthermore, the highly liquid supply has seen a significant reduction over the past three years, down from 3.7 million BTC in March 2020 to the current 2.9 million BTC. This decline may signify a thinning of active traders or entities that rapidly move Bitcoin. 
These liquidity dynamics collectively hint at a constriction of Bitcoin’s active supply. The combination of a growing illiquid supply and shrinking liquid and highly liquid supplies can create a ‘short squeeze’ scenario. This occurs when the market’s limited active supply struggles to satisfy trading demand, potentially triggering sharp upward price movements as traders scramble to cover their short positions. 
<figure id="attachment_368771" aria-describedby="caption-attachment-368771" style="width: 100%" class="wp-caption aligncenter">
 <img class="wp-image-368771 size-full" src="https://cryptoslate.com/wp-content/uploads/2023/10/CS.png" alt="Liquid and Illiquid Supply: (Source: Glassnode)" width="1800" height="1013" srcset="https://cryptoslate.com/wp-content/uploads/2023/10/CS.png 1800w, https://cryptoslate.com/wp-content/uploads/2023/10/CS-300x169.png 300w, https://cryptoslate.com/wp-content/uploads/2023/10/CS-1024x576.png 1024w, https://cryptoslate.com/wp-content/uploads/2023/10/CS-768x432.png 768w, https://cryptoslate.com/wp-content/uploads/2023/10/CS-1536x864.png 1536w" sizes="(max-width: 1800px) 100vw, 1800px">
 <figcaption id="caption-attachment-368771" class="wp-caption-text">
 Liquid and Illiquid Supply: (Source: Glassnode)
 </figcaption>
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Bitcoin illiquid supply hits all-time high reaching 15.3 million BTC

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