Bitcoin’s ‘Available Supply’ Approaches 4th BTC Decline at Historically Low Price: Glassnode

The fourth Bitcoin halving is approaching fast and is estimated to be only 157 days away. Meanwhile, there is significant tightening in the supply of Bitcoin, which has now reached unprecedented levels in its history.

Glassnode's latest report shows that ‘available supply' is at historic lows, and the value of ‘supply storage' is up to 2.4x higher than current supply.

Bitcoin supply tightness

The report talks about three important stages, each of which provides important insights into the Bitcoin market. The first revolves around the ‘Available and Active' supply, which measures the amount of commercially available BTC that is actively circulating.

Notable metrics in this category include the short-term holder supply, which stands at 2.33 million BTC, which is at a multi-year low. This collection includes coins up to 155 days old, statistically the most used.

Additional indicators of ‘hot' supply include less than one month (1.39 million BTC) and futures open interest (0.41 million BTC), representing ‘supply exposure' in equity markets. Generally, this ‘hot supply' amount accounts for 5% to 10% of a day's sales of actively engaged distribution.

Moving into the second phase, the measurement of the ‘Supply Storage and Savings' phase showed a decrease in supply, indicating a significant movement away from currency exchange and active trading of coins towards cold storage and a long-term trend. Investors bags.

As of February 2022, all entities holding less than 100 BTC have exceeded their new reserves. This marked the longest and most enduring period in history.

The third step zeroes in on analyzing the impact of capital flows on market valuation. When using Realized Cap as a proxy to understand capital inflows, outflows, and asset turnover, Bitcoin supply and liquidity are found to be very tight.

Bitcoin split strategy

The halving stands out as one of the most anticipated events on the Bitcoin calendar. Although it occurs every 210,000 blocks and reduces the amount of new coins by 50%, the exact date and time are unknown “due to the inherent volatility and contingent nature of mining.

However, those who trade around these semi-cycles can earn better returns than those who buy and hold. This has been speculated by trader veteran Plan B as most of the recent Bitcoin price gains have occurred in close proximity to the previous three halving events. According to his estimates, traders can make returns of up to 2,500% by actively participating during Bitcoin halving events.

All of Bitcoin's price increases have occurred around 3 halves (H-6m/H+18m). Being in the market during those 3 periods and out the rest of the time would grow a $5 investment to $130k (purple line) instead of buying and holding for $37k (blue line). But the NFA will be interested to see what the fourth center is… pic.twitter.com/TXQAszVZuz

— PlanB (@100trillionUSD) November 12, 2023