Despite our cautious macroeconomic outlook, bitcoin supply side dynamics look extremely strong. The amount of bitcoin as a percentage of circulating supply that hasn’t moved in one year or more is approximately 1% away from all-time high levels.
Previous occasions of one-plus year dormant supply at similar levels predated bull markets. While macroeconomic conditions were markedly different during these periods, we find this to be extremely notable nonetheless, showing just how tight the supply side of the bitcoin market currently is.
Next, we can see that illiquid supply continues to increase, displaying a similar trend. Even in this drawdown, illiquid supply percent of circulating supply has surpassed 2021’s high of 76.02% to 76.25%. Another way to view that dynamic is through the Supply Shock Ratio (illiquid supply over the sum of highly liquid and liquid supply) which continues to show the strength of illiquid supply growth relative to the rest of supply.