Bitcoin's supply dynamics are undergoing significant changes, according to research by Cryptoquant. Demand for bitcoin has been increasing steadily since September, with a monthly growth rate of 228,000 BTC. Long-term holders who never sell, known as accumulator addresses, have also been accumulating at a rapid rate of 495,000 BTC per month. These trends, along with bitcoin reaching record-high prices of $108,000, indicate strong investor confidence and a bullish sentiment in the market. Additionally, the total USD stablecoin market capitalization has grown by 20% since October, reflecting increasing capital inflow into the cryptocurrency sector. On the supply side, the available sell-side inventory of bitcoin has shrunk to its lowest level in over four years, with a decline of 678,000 BTC so far this year. This decrease in supply is accompanied by a drop in the liquidity inventory ratio, indicating a tightening market. These shifts are partly attributed to market expectations of pro-cryptocurrency policies under the incoming U.S. administration. Overall, these factors highlight the interplay between macroeconomic expectations, liquidity conditions, and on-chain metrics, providing a comprehensive view of bitcoin's tightening market.



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