Bitcoin short-term supply continues to shrink further as the amount of BTC changing hands drops down to 2015 levels.
Bitcoin Short-Term Supply Declines To 2015 Levels
As per the latest Arcane Research report, the BTC supply shock continues as the number of coins changing hands drops down to levels not seen since 2015.
The “number of Bitcoin changing hands” here refers to all the coins that were spent recently. “Recent” depends on the definition of the analyst, but the chart in the report uses the 1-month and the 3-month supply metrics.
This supply is often referred to as “short term,” as these coins are associated with traders seeking to make quick profits.
On the other hand, the long-term supply shows the number of coins that haven’t moved in the last few months, and so the indicator is associated with long-term holders.
Now, here is how the chart for the 3-month and 1-month supply has looked like for Bitcoin lately:
BTC’s short-term supply seem to be going down | Source: The Arcane Research Weekly Update – Week 36
As the above chart shows, only 6.8% of the circulating supply has changed hands within the last month, when the figure for the 3-month metric is around 15.8%.
Related Reading | Why Is Ukraine Is Doing An “El Salvador” And Making Bitcoin Legal Tender?
The 1-month Bitcoin supply is actually at all time lows right now, while the 3-month supply sits around levels similar to 2015.
The recent push above $50k saw a slight increase in the 1-month supply, but it was mostly driven by coins last spent within 1-3 months. Therefore, only short-term holders seeking to realize profits moved their BTC during this period.
Related Reading | By The Numbers: How Much Western Union And MoneyGram Will Lose From El Salvador’s Bitcoin Law
This means that long-term holders haven’t moved their coins amid these recent rallies, and that they are waiting for the price of Bitcoin to appreciate further before moving their assets. The low short-term supply can therefore turn out to be a bullish indicator.
At the time of writing, Bitcoin’s price floats around $47.5k, up 2.7% in the last 7 days. Over the past month, the crypto has gained 2.4% in value.
The below chart shows the trend in the price of the coin over the last three months:
BTC seems to have finally gained some upwards momentum | Source: BTCUSD on TradingView
After a period of relatively low volatility, Bitcoin has finally gained some sharp price movement. At the moment, the coin seems to be climbing back up as it gains ground above $47k.
It’s unclear right now where the crypto might head next, but if the low short-term supply is anything to go by, long-term investor sentiment seems to be bullish.
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research