According to Willy Woo, the supply shock is occurring, just like it did in Q4 2020 before Bitcoin’s price soared. As Bitcoin (BTC) trades sideways inside the $30,000–$40,000 area, new information concerning the possibility of a bullish breakthrough emerges. Why is ‘Supply Shock’ Occurring? Willy Woo, an on-chain expert, predicts the occurrence of a supply shock in the Bitcoin market if long-term holders continue to rake BTC supply from short-term holders. According to Woo’s Friday email, the procedure may cause additional Bitcoin to be removed from circulation. The expert mentioned the Bitcoin Supply Ratio – the ratio of Bitcoin owned by powerful hands versus weak hands – adding that the former is actively absorbing selling pressure from whales who have been dumping their crypto holdings since February. “It reminds me of the supply shock that passed the market undetected in Q4 2020,” Woo stated. “Pundits were arguing if Bitcoin was an inflation hedge in a post-COVID environment when statistics showed long-term investors stacking Bitcoin at a rapid pace.” “The price then went on a tear, swiftly decoupling from its close connection with stocks.” The Number Of Active Users Is Increasing Another on-chain data analytics tool, Glassnode, has further enhanced Bitcoin’s brisk adoption prospects. According to the webpage, the Bitcoin network has been onboarding an average of 32,000 new members each day, a new high for 2021. The Bitcoin Network User Growth indicator peaked in January 2018, reaching over 40,000 before falling along with the price. It showed that new users stopped joining the Bitcoin network when its price fell from a high of $20,000 in January 2018, as low as $3,200 in December 2020. Bitcoin is now trading below $34,000 at the time of publication, up 17.52% from its previous low of $28,800 on June 22. According to Bitcoin’s co-founder, new users are increasing at the fastest rate since 2021. Bitcoin Withdrawal Transactions Reaches One-Year High For the first time in a year, Bitcoin’s net outflow from spot markets exceeded 60,000 on Tuesday. The total number of Bitcoin deposits into the wallets of spot exchanges has fallen below 20,000. However, exchanges’ overall Bitcoin reserves have remained constant since May.
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