Bitcoin’s illiquid supply hits all-time high as hodlers continue to accumulate

Despite Bitcoin recently breaking through the $28,000 resistance level, the crypto market has been relatively flat for the past month. The lack of volatility in the historically aggressive market has been an underlying trend evident in several on-chain metrics.

Bitcoin hodlers have been capitalizing on this sideways price movement, continuing the steady accumulation that’s been the dominant trend this year. Data from Glassnode showed continuous growth in hodler net positions, with an average of 36,500 BTC being added to their balances every month.

This accumulation phase is not a new development. Instead, it has been a slow and steady march beginning in June 2021. Historical data shows two similar accumulation periods — one spanning from April 2014 to December 2016 and another from March 2018 to October 2020. With both periods lasting approximately two years and seven months, historical patterns suggest it could be at least six months before the market sees another hodler distribution cycle.

This increase in hodler accumulation is also seen in Bitcoin’s illiquid supply, or the amount of Bitcoin that is not readily available to buy, sell, or trade. On June 20, Bitcoin’s illiquid supply reached its all-time high of 15.2 million BTC. This represents 78% of Bitcoin’s circulating supply on June 20.

There has been a 2.2 million BTC increase in the illiquid supply since the beginning of 2020, showing a 17% increase. While this year has only seen a 2% rise in illiquid supply, the seemingly small number equates to over 298,600 BTC added to illiquid wallets.

The amount of Bitcoin held on exchanges remained relatively flat since the beginning of the year, posting a 0.85% decrease. However, the drop becomes much steeper when zooming out — since the beginning of 2020, the amount of Bitcoin held on exchanges decreased by 25%.

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