What are the two major factors driving the market's optimism about BTC?

summary

• Retail Bitcoin investors, especially “crabs” and “shrimps,” have accumulated 35,000 BTC in the past 30 days, highlighting the growing confidence and participation of small holders.

• With 40,000 BTC withdrawn from exchanges in the past 30 days, reduced liquidity means a potential supply squeeze, creating a bullish environment for future Bitcoin price increases.

Accumulation in the Bitcoin (BTC) ecosystem has increased significantly over the past 30 days, with net additions of approximately 88,000 BTC. This period of strong accumulation has continued throughout most of September, and notably, the increase is approximately seven times the monthly issuance of 13,500 BTC. Such strong accumulation has not been seen since the fourth quarter of 2023, a period when the price of Bitcoin rose rapidly.

A deeper analysis of this net accumulation shows that retail investors, especially small holders, are playing an important role. Investors holding less than 10 BTC, often categorized as “crabs” (holding 1 to 10 BTC) and “shrimp” (holding less than 1 BTC), have accumulated a total of 35,000 BTC in the past 30 days. This retail accumulation trend has continued since May, highlighting the growing confidence and participation of small investors in the market.

Another factor driving the price of Bitcoin is the massive outflow of Bitcoin from exchanges. In the past 30 days, about 40,000 BTC have left exchanges, indicating a decrease in liquidity. When Bitcoin is withdrawn from exchanges, it may indicate that holders intend to remove it from the market, thereby reducing selling pressure and creating a bullish environment for future price increases, as 74% of the circulating supply is considered illiquid.

Bitcoin: Exchange Balances and Issuance (Glassnode)

The combination of retail accumulation and exchange outflows suggests that Bitcoin’s current momentum could continue to gain momentum in the coming months.