Bitcoin News Today: Bitcoin hits 7.9% circulating supply deficit as $105,000 support level tested

Bitcoin’s circulating supply is currently experiencing a notable scarcity, with 7.9% of coins in deficit, up from 5.4% the previous month [1]. This trend indicates that more investors are holding Bitcoin rather than selling it, reducing the number of coins actively available on exchanges and in the broader market. Analysts from COINOTAG suggest that this behavior reflects strong investor confidence and a willingness to retain holdings amid ongoing market volatility [1].

A critical focus for traders and investors is the $105,000 support level, which has emerged as a key benchmark for Bitcoin’s near-term stability. COINOTAG highlights that maintaining this level is essential to preserving bullish momentum and reinforcing investor confidence. If the price holds above this threshold, it could signal continued strength and prevent a broader market downturn [1]. The support level has moved upward from $98,000 in the previous quarter, indicating a shift in market psychology toward higher price expectations [1].

The increasing supply deficit is attributed to a shift in investor behavior, with on-chain data showing a decline in active circulating coins. This trend is largely driven by long-term holders who are reducing sell pressure, a move that tightens supply and potentially supports price stability. COINOTAG notes that as fewer coins are available for trading, the market becomes less prone to sharp price swings, offering a more favorable environment for sustained price appreciation [1].

The implications of this supply dynamic are significant. A higher supply deficit typically limits downward price pressure and can reinforce Bitcoin’s value proposition as a store of value. By reducing the availability of coins for immediate trading, holders are indirectly influencing market dynamics in a way that supports long-term price resilience. This behavior aligns with broader investor strategies of accumulating and holding during periods of uncertainty, further reinforcing the narrative of Bitcoin as a long-term asset [1].

Frequently asked questions from market participants highlight the importance of understanding the factors behind the supply deficit. The primary driver is the decision of investors to keep coins off exchanges, reducing available supply. This behavior is often fueled by market uncertainty and a shift toward long-term investment strategies. Similarly, the $105,000 support level is seen as a psychological anchor for buyers, encouraging market participation and potentially preventing further price erosion [1].

Key takeaways from COINOTAG’s analysis suggest that Bitcoin’s 7.9% supply deficit is a strong indicator of market strength and investor conviction. The $105,000 level is critical for maintaining upward momentum, and the broader trend of reduced selling activity is supporting a more stable price environment. As on-chain data continues to reflect tighter supply conditions, the market may see increased resilience in the months ahead [1].

Bitcoin’s 7.9% circulating supply deficit continues to highlight growing scarcity, with the $105,000 support level serving as a key indicator for price stability. COINOTAG’s analysis underscores the importance of sustained holding patterns and reduced selling pressure in shaping Bitcoin’s near-term market outlook [1].

Source:

[1] Bitcoin Analysis: 7.9% of Circulating Supply in Deficit as $105,000 Support Level Gains Attention

https://en.coinotag.com/breakingnews/bitcoin-analysis-7-9-of-circulating-supply-in-deficit-as-105000-support-level-gains-attention/