Bitcoin (BTC) Price Breakout Is Imminent as "Hot Supply" Metric More Than Halves

Technical market indicators suggest a price breakout for Bitcoin (BTC), the world's largest digital currency, is imminent.

Technical market indicators suggest a price breakout for Bitcoin (BTC), the world’s largest digital currency, is imminent. Notably, Bitcoin’s “hot supply” metric has more than halved in the last three months, dropping from 5.9% to 2.8%.

An update shared by Glassnode reveals that Bitcoin’s circulating supply, which is actively traded on the crypto market, has fallen by over 50%. This suggests that coin holders are trading fewer Bitcoin units.

The implication is that traders are holding onto their Bitcoin instead of selling it as the BTC price recovers. This development is significant considering the near stagnation that BTC has experienced in the last 14 days. It indicates that traders are betting on a price increase and might have decided to wait out the downturn.

Additionally, a drop in hot supply could mean market liquidity is tightening, making purchasing large amounts of BTC more difficult.

It could also signal a potential supply squeeze. Analysts say if this is the case, it might push prices higher, whether demand remains steady or increases.

This scenario is bullish for Bitcoin. Notably, a shrinking liquid supply means fewer coins available for exchange transactions. This, in turn, could trigger a price increase due to scarcity as demand outstrips supply.

Within the last 24 hours, Bitcoin has rallied to a high of $87,443.27 from $83,440. As of this writing, the coin is trading at $85,256.80, a 2.22% increase. However, trading volume remains bullish at 59.54%, or $37.81 billion. This article was originally published on U.Today