Market activity around Bitcoin (BTC) has increased since the approval of spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC).

A recent market report from Bitfinex shows a slight increase in the amount of BTC in circulation. Long-term investors are holding on to more assets, spurring a Bitcoin price growth above $46k.

In Bitfinex Alpha, this week we explain how Bitcoin miners have been putting pressure on the $BTC price

Miners are driven by the price surge and the need to realise capital in order to upgrade mining equipment ahead of the Bitcoin halving.https://t.co/7ocyBJU9H5 pic.twitter.com/eqJiT4ssf4

— Bitfinex (@bitfinex) February 5, 2024

The report dived into the “Supply Last Active” and other metrics used to show the circulating supply of Bitcoin between multi-year periods and how it affects current price swings.

A significant factor in the slight increase in circulation is the approval of spot Bitcoin ETFs which saw dormant Bitcoin re-introduced to the market.

The months leading up to the approval date, Jan 11, were characterized by massive inflows into the market, with many analysts predicting surging prices.

Recent market activity has reduced the gap between the stored Bitcoin supply and the active supply, increasing steadily based on ETF-related factors. Per Bitfinex:

“This movement of older Bitcoin supply is an important indicator of market behavior, especially among long-term holders. It reflects the changing sentiment and strategies of these investors, who are most likely responding to market developments like the introduction of Bitcoin ETFs or reassessing their positions in light of current market conditions.”

Analysts Point to Bitcoin Value Days Destroyed As Supply Shifts

The Value Days Destroyed (VDD) metric is used to project when Bitcoin’s price has heightened in bull cycles and is calculated by multiplying the asset’s price by the Coin Days Destroyed value.

At the moment, there is an increase in VVD, indicating that some investors are offloading their assets. Historically, VVD highs precede price peaks almost similar to the bear market sell-offs.

However, the liveliness metric remains at multi-year lows, showing that certain holders will keep their assets to make a higher profit since the price plunged immediately after the spot Bitcoin approvals.

“This suggests that a significant majority of the Bitcoin supply continues to be tightly held. The reasons for this could vary: holders may be waiting for higher spot prices before they decide to sell, or they might be looking for increased market volatility as a catalyst for spending their coins.”

The upcoming halving is another factor causing recent Bitcoin price movements.

Miners introducing their Bitcoin reserves to exchanges indicates an inclination to sell off leverage assets to improve capacity and efficiency ahead of the halving.

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