Bitcoin Faces Supply Squeeze as Long-Term Holders Accumulate 800,000 Coins

Bitcoin ($BTC) is currently facing an imminent supply shortage as long-term holders continue to accumulate the cryptocurrency. According to data from Glassnode, long-term Bitcoin holders have absorbed a substantial amount of Bitcoin, far exceeding the amount mined during the same period. This accumulation has resulted in a liquidity vacuum, with exchange balances dropping to historic lows.

The on-chain data indicates that long-term holders have occupied over 800,000 Bitcoin coins in the past 30 days, a pace that is nearly sixty times faster than the cumulative amount mined by miners during the same period. The total mined Bitcoin amount during this time was 13,500 coins. This broad accumulation is unprecedented and has created a significant liquidity vacuum, raising concerns among traders and the community about the potential for a supply squeeze.

The dropping Bitcoin balances across cryptocurrency exchanges underscore an imminent supply shock. As Bitcoin reserves on centrally controlled exchanges decline to notable lows, an alarming dip is being witnessed in sell-side depth. The robust institutional inflows, including a net inflow of $2.2 billion in the recent couple of days, are exacerbating this scenario. If demand for Bitcoin persists or increases, the market could experience a noteworthy supply squeeze.

The continuous accumulation by long-term holders and the significant institutional inflows are putting pressure on the Bitcoin supply, particularly on exchanges. This pressure is likely to intensify as long-term holders continue to accumulate and institutional investors increase their holdings. The supply shortage could lead to a significant increase in Bitcoin's price, as the available supply on exchanges continues to decrease. However, it is important to note that the actual impact of the supply shortage on Bitcoin's price remains to be seen, and the market could experience volatility as a result of the supply squeeze.