Bitcoin Liquidity is Tightening: Could There Be a Price Increase?

In recent days, the price of Bitcoin (BTC) has been fluctuating around 110,000 dollars, attracting the attention of investors, while it has been observed that the liquidity situation is increasingly tightening. Data shared by a CryptoQuant analyst revealed that the selling side liquidity of Bitcoin has dropped to its lowest levels since 2018. Accordingly, the amount of Bitcoin available for sale in the market has decreased to approximately 3.12 million BTC.

The importance of the balance between declining supply and long-term investor demand becomes even more evident with this observed liquidity contraction. Particularly in the last 30 days, demand from accumulation addresses has been recorded at 373,700 BTC. This situation indicates that long-term investors, who typically buy during price drops, have become active again. According to the CryptoQuant analyst, this trend supports the idea that the market is in a quiet accumulation phase ahead of a possible bull run.

For those wondering whether the liquidity contraction signals a new bull rally for Bitcoin, interesting data is available. The analysis shows that the Liquidity Inventory Ratio (LIR) has fallen to approximately 8.3 months, which indicates that the current liquidity can only meet demand for less than nine months. Historically, it is known that strong price rallies often occur just before periods of liquidity tightening.

The CryptoQuant analyst emphasized that the combination of decreasing liquidity and increasing demand from long-term investors paints a positive picture for a price increase in the medium term. If this trend continues through the last quarter of the year, it is stated that the price of Bitcoin could rise above 115,000 dollars, particularly supported by buying flows from U.S. investment funds and ETFs.