Briefing
The core insight reveals that Bitcoin’s Illiquid Supply → coins held by entities who historically refuse to sell → has reached a new all-time high, now controlling over 72% of the total circulating supply. This suggests a deepening structural supply shock where the available selling pressure is rapidly drying up. The market is fundamentally bullish because the vast majority of coins are locked away by conviction holders, meaning any modest increase in demand will face severe inventory constraints. The most important data point is the Illiquid Supply now controlling over 72% of all circulating Bitcoin.
Context
Many investors are currently wondering if the recent price consolidation is a sign of market fatigue or if a deeper correction is imminent. The common uncertainty centers on whether long-term holders are finally selling their supply into the recent rally, which would signal a cycle top. This data helps answer the question of who is actually controlling the supply and if there is enough available inventory to meet future demand.
Analysis
The Illiquid Supply metric measures the amount of Bitcoin held by entities that have historically spent less than 25% of the coins they have ever received. This indicator measures the conviction of the strongest holders; when it rises, it means more coins are being moved into wallets where they are rarely, if ever, sold. When this metric goes up, the available supply for trading shrinks, creating a supply shock.
The data shows this metric has been in a consistent, accelerating uptrend over the past year, recently breaking to a new all-time high of over 72% of the total supply. This pattern confirms that the market’s long-term foundation is getting stronger as coins are permanently removed from the liquid market, proving the core thesis of a deepening supply squeeze.
Parameters
- Illiquid Supply Percentage → Over 72% of total supply. This is the portion of Bitcoin held by entities who have historically sold less than 25% of their received coins.
- Trend Duration → Consistent uptrend since early 2024. This indicates a persistent, long-term accumulation phase by conviction holders.
- Metric Type → On-Chain Supply Dynamics. This metric tracks the actual movement and spending behavior of coins on the blockchain.
Outlook
This insight suggests the near-term future is primed for a sharp move upward once new demand enters the market. The structural scarcity created by the Illiquid Supply means that even a moderate buying wave will encounter severe resistance due to the lack of available sellers. A confirming signal to watch for is a sustained increase in exchange outflows, which would show that the remaining liquid supply is also being moved into long-term storage, accelerating the supply shock.
Verdict
The structural supply shock is deepening, confirming that the vast majority of Bitcoin is locked away by long-term conviction holders.
