The Crypto Market Might Be Boring Right Now, but Good Days Are Ahead for Bitcoin Bulls!

• According to Blockware Solutions and Glassnode, the percentage of Bitcoin’s circulating supply that has been active in the past month dropped to a record low of 5.4% earlier this week.
• A favored strategy in the crypto market is the “buy and hold” strategy, where so-called long-term holders control over 75% of the circulating supply.
• Apart from the potential launch of a spot Bitcoin exchange-traded fund (ETF) in a few months, macro and regulatory concerns seem to be favoring the bears.

The Bitcoin and cryptocurrency market may be dull right now, but according to on-chain data, the data is trending favorably for the bulls and the price could experience an upward rally.

On-Chain Data Favors Bitcoin Bulls

Beneath the seemingly dull crypto waters lies a bullish Bitcoin (BTC) that may be setting the stage for an overly significant price rally.

According to Blockware Solutions and Glassnode, the percentage of Bitcoin’s circulating supply that has been active in the past month dropped to a record low of 5.4% earlier this week. In other words, fewer coins are changing hands, which is seen as a sign of weakness on the supply side. At the time of writing, Bitcoin’s circulating supply was 19.48 million.

Blockware Solutions stated, “Price is determined at the margin, i.e., those who transact Bitcoin continuously drive short-term price action. As liquidity on the supply side dries up, i.e., as less supply changes hands, any demand catalyst will send the price soaring.”

The percentage of the circulating supply that has remained inactive for over a year is around 70%. A favored strategy in the crypto market is the “buy and hold” strategy, where so-called long-term holders control over 75% of the circulating supply. Glassnode defines long-term holders as addresses that have held coins for at least 155 days.

Bull Catalysts Awaited

Apart from the potential launch of a spot Bitcoin exchange-traded fund (ETF) in a few months, macro and regulatory concerns seem to be favoring the bears.

David Lawant, the Chief Research Officer at FalconX, stated in a note sent on Tuesday, “The macro scenario has never been more uncertain, and the ‘higher for longer’ sentiment can limit risk assets, including crypto.” Lawant also noted, “There might be some potential selling pressure coming from government-seized wallets, bankrupt portfolios, and large token unlocks in the next 6-12 months, and finally, more regulatory action in the US is yet to come.”