Image(s) are kindly provided by Unsplash
Quick analysis of the situation
Ah, Bitcoin — the glittering digital currency that’s as fickle as your favorite soap opera character. One minute it’s soaring to new heights, the next it's tripping over its own shoelaces. But hold onto your virtual wallets, folks, because there's news on the blockchain that might just pique your interest.
Recent reports have revealed that Bitcoin's liquidity is drying up faster than a desert cactus in July, hitting a seven-year low at around 3.12 million BTC. That’s right, the amount of Bitcoin available for trading is at its lowest since 2018, as BTC continues to hover below the coveted 99-day Moving Average (MA), which sits at a tantalizing $112,086. It’s like watching your favorite show enter a season of filler episodes — you know something explosive is coming, but for now, we’re stuck with plot twists that just don’t cut it.
So why is liquidity running lower than a limbo dancer at a family barbecue? According to the brilliant minds over at CryptoQuant, we're seeing a delightful tug-of-war between falling active circulating supply and rising institutional demand. While some investors are holding onto their Bitcoin like a toddler clutching their security blanket, long-term holders have opted to add to their stash, scooping up 373,700 BTC in just the last month. Talk about commitment! If that’s not love, I don’t know what is.
Now, don’t get too cozy sipping your coffee just yet. The Liquidity Inventory Ratio (LIR), which essentially tells us how much liquidity is available versus the hunger for trade, has nosedived to around 8.3 months. Essentially, this means there’s enough liquidity to cover less than nine months’ worth of demand. If this was a romantic relationship, it might be time for a serious heart-to-heart about commitment levels — or maybe just a good old breakup.
Despite the current downswing, the medium-term outlook for Bitcoin is looking as rosy as a sunset on a beach. The growing demand from institutional and long-term investors coupled with dwindling liquidity could spell a bullish trend — if all goes well. Might we see Bitcoin scream past the $115,000 mark before the year ends? Time will tell; just remember to keep your popcorn handy.
Of course, not everyone is convinced that the peak has been reached in this wild market cycle. Some analysts are still playing in the “where do we go from here?” sandbox, believing there’s a solid chance Bitcoin has more tricks up its sleeve. The latest on-chain data suggests that the BTC NVT Golden Cross hasn’t even entered the previously great heights that have marked past cycle tops. You can practically hear the nail-biting every time Bitcoin fluctuates a few hundred dollars, can’t you?
Just as we’re getting comfy with these cryptic charts, BTC is currently trading at $111,295, enjoying a cheerful 2.1% uptick in the last 24 hours. So, whether you’re hoarding your Bitcoin like a treasure chest or anxiously waiting for the next market swing, one thing's for sure: in the world of BTC, volatility is the only guarantee. So strap in, folks, because this is one rollercoaster ride you won’t want to miss!
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Image(s) are provided by Unsplash and/or other free sources. They are illustrative and may not represent the content truly.
0 Comments
Please, behave!