Bitcoin Supply on the verge of asphyxiation Before 2024 Halving — Incoming Crash?

As the 2024 Halving rapidly approaches, a recent report from Glassnode reveals an alarming tightening of Bitcoin’s available supply. This analysis delves deep into the key indicators predicting a skyrocketing demand from investors in the months leading up to this critical event. 

Bitcoin’s supply reaches historically low levels

Glassnode’s examination of the Bitcoin supply dynamics before the fourth Halving reveals historical lows in BTC’s available supply. 

According to the report, short-term holders now only hold 23.8% of the total supply, reaching an unprecedented level. Furthermore, only 5 to 10% of bitcoins are actively traded, with the remainder being accumulated by long-term investors.

This relative scarcity situation starkly contrasts with previous cycles. It results from a paradigm shift: holders are storing their bitcoins away from exchanges, anticipating new highs.

Glassnode’s report examines this phenomenon in three stages in detail. It first analyzes the “active and available” supply, then the “saving and hoarding” rates, and finally the impact of capital flows on valuation.

This comprehensive approach reveals massive downward pressure on short-term supply, to the benefit of long-term accumulation.

An explosive cocktail prior to the 2024 Halving

This thinning of the available supply comes at a critical moment, on the eve of the Halving scheduled for April 2024. This event, which occurs every 210,000 blocks, cuts the pace of new Bitcoin issuance by 50%.

Combined with the halving of issuance, the drying up of supply could trigger a major bullish surge. After previous halvings, the BTC price experienced spectacular rallies. Glassnode’s report also identifies striking similarities between the current conditions and the troughs of past bear markets.

For savvy investors, the message is clear: this scarcity of supply against a growing demand could propel BTC’s price to new heights. The current tightening of supply seems to herald an explosive bullish cycle after the 2024 Halving. The winning strategy? Patient accumulation in preparation for the upcoming storm.