The reduction of Bitcoin market liquidity can be good for the price,if the demand for Bitcoins goes up rapidly.
On the other hand,it can be bad if the demand goes down.
In conclusion,I think that reduced market liquidity can boost the price volatility of Bitcoin and make the BTC market even more unpredictable.
However,I don't think that trading volume on crypto exchanges going down+big investors moving more BTC into cold wallets necessarily means that the overall Bitcoin market liquidity would go down.
The big investors can act pretty quickly and sell their BTC,if they wan to.Not all of those entities will be long term HODLers.
Topic: #Bitcoin is seeing the largest depletion of liquidity since years (Read 144 times)
January 27, 2021, 04:40:11 AM
Wall Street changed the way the game is played, I do not know if microstrategy or grayscale or any other big corporation is actually inside wall street or they could be in a totally different state or even nation but the notion of "wall street" is not about just the companies there but more about big financial company nowadays, so we can say wall street definitely got involved from all around the world. That means we are talking about something both good and bad at the same time, it is just a total different thing now versus what it was 4-5 years ago for example, it was just bunch of niche investors here versus a mainstream asset nowadays.
It is good because we are taken seriously and that is what we wanted, but it is bad because they are actually a lot richer than us so they could totally keep putting their money into crypto and take our profits out of us.
It is good because we are taken seriously and that is what we wanted, but it is bad because they are actually a lot richer than us so they could totally keep putting their money into crypto and take our profits out of us.
January 26, 2021, 03:04:57 AM
This is probably all about those huge corporations that bought bitcoin and took it to their own wallets, who would keep thousands of bitcoins on an exchange? Sure there might be few people but most of those super rich people have their own wallets and that is how they keep it. This of course drops the liquidity very very low because when you withdraw over 500k bitcoins from the market and put it on the wallets of those super rich organizations, that means there is less and less money available for trading as well.
I am not saying this is a good or bad thing, all I am saying is that this happened. There were less liquidation when we reached peak because that was "enough" for many, but there was less when we were 3.8k back in 2018 November as well, both sides have less liquidity because people reach the peak points, there is no real meaning to this.
I am not saying this is a good or bad thing, all I am saying is that this happened. There were less liquidation when we reached peak because that was "enough" for many, but there was less when we were 3.8k back in 2018 November as well, both sides have less liquidity because people reach the peak points, there is no real meaning to this.
January 21, 2021, 04:25:30 PM
Seeing how a lot of big players are already in the game, no one at this point would want to miss a chance in taking a lovely share of the pie in the long term. Demand has basically outgrown supply by now, and it seems to be continuing as days pass by. The volumes on exchanges are going down as well, suggesting that most of the coins a few months back are already locked somewhere waiting for the right time to be unlocked again.
January 21, 2021, 04:06:31 PM
According to @glassnode : #Bitcoin is seeing the largest depletion of liquidity since years.
The good about the largest depletion of liquidity is that they not only represent withdrawals from popular platforms, but the entities that withdraw are considered entities that invest in the long term at least.
https://studio.glassnode.com/metrics?a=BTC&category=Supply&m=supply.LiquidChange
According to the plan, the last liquidity shortfall of such a magnitude was in 2016.
The most important point is the increase in demand, or at least the continuation of the current demand, so that there is an increase in the price, which seems to be growing.
Quote
In the past 30 days, around 270,000 BTC moved to entities considered HODLers.
The good about the largest depletion of liquidity is that they not only represent withdrawals from popular platforms, but the entities that withdraw are considered entities that invest in the long term at least.
https://studio.glassnode.com/metrics?a=BTC&category=Supply&m=supply.LiquidChange
According to the plan, the last liquidity shortfall of such a magnitude was in 2016.
The most important point is the increase in demand, or at least the continuation of the current demand, so that there is an increase in the price, which seems to be growing.
As long we do see a sign that demand is growing then it should really be enough in spite on seeing those depletion and to know that they are just normal part of a healthy market
even though telling that those who withdraw are long term investors then no one can tell but rather it would be evident basing off into those money that do flow once again in a particular time.
Bitcoin market had been like this where due to technicals we can able to spot out the differences and tracks on where and whats the progress when it comes into its
value after all the years.
January 21, 2021, 01:09:46 PM
So this is a good sign for even average joe to look at and to invest with at little as they can in their personal wallet and not on exchange and wait till the market goes on a super fast rally that we have seen in the last three months.
I actually think we're still in the "super fast" rally. Yes, it's at 30k right now but at volumes laughably small and super thin liquidty, it wouldn't take much for price to balloon again as soon as liquidity swells for buyers.
Average joes probably still are buying not-bitcoin from exchanges with not-real-wallets;) If every buy order were physically settled, we'd be seeing an even worse liquidity depletion.
January 21, 2021, 12:24:45 PM
Exactly, investors are now moving to their personal wallet, which means they are going to hold for as long as they can as opposed to traders or speculators who's willing to left their coins in an exchanges for obvious reasons.
So this is a good sign for even average joe to look at and to invest with at little as they can in their personal wallet and not on exchange and wait till the market goes on a super fast rally that we have seen in the last three months.
It still makes sense to buy some bitcoins if there are many trusting investor to keep their bitcoin in personal wallet in hope of more than just ATH. The main thing to note is that bitcoin still has the potential to reach a higher ATH due to support from institutional investor. If this scenario is true, then I think now is a good time to buy some and hope for a fast rally to come soon. So this is a good sign for even average joe to look at and to invest with at little as they can in their personal wallet and not on exchange and wait till the market goes on a super fast rally that we have seen in the last three months.
January 21, 2021, 09:03:57 AM
Was expecting this for a while, following up from the outflows of coin from exchanges, which means people aren't willing to sell for at least the medium term.
Then you've got retail who know and expect more than the current ATH.
That's clearly demand outstripping supply.
Then you've got retail who know and expect more than the current ATH.
That's clearly demand outstripping supply.
Exactly, investors are now moving to their personal wallet, which means they are going to hold for as long as they can as opposed to traders or speculators who's willing to left their coins in an exchanges for obvious reasons.
So this is a good sign for even average joe to look at and to invest with at little as they can in their personal wallet and not on exchange and wait till the market goes on a super fast rally that we have seen in the last three months.
January 21, 2021, 06:35:40 AM
More likely it comes from institutional investors, and just this day Grayscale once again bought BTC to their trust fund of another 8,000 BTC. https://www.fxstreet.com/cryptocurrencies/news/grayscale-buys-the-bitcoin-dip-again-as-the-worlds-largest-asset-manager-prepares-to-invest-in-btc-futures-202101210332
That's clearly demand outstripping supply.
This is gonna be massive price surge for Bitcoin maybe in the coming months or even at the last quarter of the year, just my assumption. January 21, 2021, 06:16:07 AM
Was expecting this for a while, following up from the outflows of coin from exchanges, which means people aren't willing to sell for at least the medium term.
Then you've got retail who know and expect more than the current ATH.
That's clearly demand outstripping supply.
Then you've got retail who know and expect more than the current ATH.
That's clearly demand outstripping supply.
January 21, 2021, 04:33:49 AM
The most important point is the increase in demand, or at least the continuation of the current demand, so that there is an increase in the price, which seems to be growing.
I totally agree. I've just also merited a post about this in the WO thread. This is the key factor to the increase in price: depletion of liquidity+same demand or increasing demand can only make the price go higher and higher. Let's see how far this goes because at some point when the price is higher liquidity will increse. Let's hope it will be when the price is much much higher.
January 21, 2021, 02:14:38 AM
According to @glassnode : #Bitcoin is seeing the largest depletion of liquidity since years.
The good about the largest depletion of liquidity is that they not only represent withdrawals from popular platforms, but the entities that withdraw are considered entities that invest in the long term at least.
https://studio.glassnode.com/metrics?a=BTC&category=Supply&m=supply.LiquidChange
According to the plan, the last liquidity shortfall of such a magnitude was in 2016.
The most important point is the increase in demand, or at least the continuation of the current demand, so that there is an increase in the price, which seems to be growing.
Quote
In the past 30 days, around 270,000 BTC moved to entities considered HODLers.
The good about the largest depletion of liquidity is that they not only represent withdrawals from popular platforms, but the entities that withdraw are considered entities that invest in the long term at least.
https://studio.glassnode.com/metrics?a=BTC&category=Supply&m=supply.LiquidChange
According to the plan, the last liquidity shortfall of such a magnitude was in 2016.
The most important point is the increase in demand, or at least the continuation of the current demand, so that there is an increase in the price, which seems to be growing.
Jump to: