Long-term investors continue to hoard bitcoin, sucking up market supply and helping the cryptocurrency maintain its broader upward trajectory.
Data provided by Glassnode shows the total balance of bitcoin held in “accumulation addresses” rose to a 3.5-year high of 2,851,608 BTC on Tuesday. That amounts to 15.32% of the total circulating supply of 18,618,081 BTC. The number stood slightly below 14% three months ago.
Accumulation addresses are those that have at least two incoming non-dust transfers (tiny amounts of bitcoin) and have never spent funds. The metric excludes addresses active more than seven years ago to adjust for lost coins and those belonging to miners and exchanges.
The balance locked in accumulation addresses is up 22% year on year and has increased by 80,000 BTC in the past week alone.
The continued locking up of bitcoin has been creating a sell-side liquidity shortage led by increased institutional buyers and has aided the recent bull run.
Other on-chain metrics also back the bullish picture. For instance, the number of coins held in exchange addresses continues to slide, taking more sell-side liquidity off the market. The balance held on exchanges fell to a 2.5-year low of 2,349,040 BTC on Monday.
Bitcoin is currently trading near $36,220, representing a 1.92% gain on the day, according to CoinDesk 20 data. The cryptocurrency broke out of a three-week-long descending channel with a 6% rise on Tuesday.
The breakout implies an end to the recent pullback from the record high of $41,962 reached on Jan. 8 and a resumption of the bull run.