Bitcoin

<p><a href="https://crypto-economy.com/what-is-bitcoin/" rel="noopener noreferrer nofollow">Bitcoin</a>’s market is experiencing a significant mismatch between supply and demand. Since reaching its all-time high of $73,000 in March 2024, capital inflows have dropped dramatically, from around $3 billion per day to just $730 million, according to a recent <a href="https://insights.glassnode.com/the-week-onchain-week-42-2024/" rel="noopener noreferrer nofollow">GlassNode</a> report.</p><p>This sharp decrease points to a growing number of investors becoming HODLers, choosing to hold their Bitcoin rather than sell, which suggests reduced interest in short-term trading.</p><p></p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/01ee7e68989d44f9a2b42494231007fb.jpg" /><p></p><p>Metrics on Realized Profit and Loss show a drop in new investments, leading to a more stable but less active market environment.</p><h2 id="header-0">Reduced Investor Activity Leads to Supply Decline</h2><p>As new interest fades, Bitcoin&#39;s supply is also shrinking. Short-Term and Highly Liquid Supply metrics have both fallen significantly, indicating that fewer coins are available for transactions, with many holders opting to retain their assets.</p><p>This supply reduction, coupled with low transaction volume, highlights the prevalence of HODLing and a market that is facing a liquidity shortage.</p><h2 id="header-1">Potential Volatility Ahead for Bitcoin</h2><p>The ongoing balance between declining demand and a restricted supply sets the stage for potential volatility. Historically, Bitcoin has seen significant price swings following periods of severe supply constraints.</p><p>Despite the current market conditions, there remains a considerable level of confidence among new investors, suggesting that an imminent sell-off may not be on the horizon. However, the wealth distribution between HODLers and new buyers could shift market dynamics in the near future.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/45a754c04de342f2a3afc044b1e70721.jpg" /><h2 id="header-2">A Complex Outlook for Bitcoin&#39;s Future</h2><p>The implications of this scenario are both varied and complex. Reduced demand may deter new investors, extending the current trend, while the limited number of circulating coins could create buying pressure when demand rebounds.</p><p>This delicate interplay between supply and demand is crucial to predicting Bitcoin’s immediate future. Although the situation might seem reassuring to long-term holders, the market remains at a critical turning point.</p><p>Any signs of renewed investor interest could unleash a period of high volatility. HODLers should be prepared for potential market changes, while new investors must navigate a market where illiquidity and speculation can heavily influence prices.</p><p>In the volatile world of cryptocurrencies, equilibrium is often fleeting, and patience will be essential in weathering this uncertain market cycle.</p>

Bitcoin Supply Crunch May Lead to Sharp Market Volatility Soon

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