Data shows that the short-term supply of Bitcoin has reached an all-time low. This could mean that investors are not interested in selling at this level despite the latest rally where the currency broke $ 57k.
Bitcoin short-term supply holds an all-time low
According to the latest Arcane Research Weekly Report, BTC short-term supply is currently floating near the all-time low.
“Short-term supply” here refers to the supply of money that has been transferred to the chain in the last three months.
When the value of this index rises, it means that there are plenty of short-term holders in the market right now who are looking to make a quick profit.
On the other hand, declining metric quality suggests that many holders are not interested in selling right now and are waiting for a long profit.
Now, here is a chart showing the short-term supply trend of Bitcoin throughout its history:
Looks like the indicator is currently touching all-time lows | Source: The Arcane Research Weekly Update - Week 40
As the graph above shows, short-term supply has been declining over the past few months, and has now reached a level never seen before.
Looking at the chart it seems that only the other time indicator showed values near this low in 2015.
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As of September 30, BTC short-term supply was about 14.7%. This is its lowest price. Since then in the last few weeks, the metric has increased slightly to 14.9%.
The reason behind this small rise is the current rally of Bitcoin where the currency broke $ 47k for the first time since May this year.
One thing to note here is that this indicator is based on the on-chain movement of the currency. So if some investors keep their BTC exchange instead of personal wallet, the metric will not show any increase when they sell their coins on the exchange.
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For this reason, short-term supply is not the most accurate indicator of whether investors are making a profit. Nonetheless, it shows that many holders, including their own wallets, have stopped selling right now because they think prices will rise further.
At the time of writing, the price of Bitcoin has risen 0.7% in the last seven days, close to $ 54.9k. In the last one month, crypto has gained 24.6% value.
The following chart shows the last five days trend of BTC prices:
Looks like Bitcoin is showing a dip right now after a large move up | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research