The illiquid supply of Bitcoin (BTC USD) approached 14.4 million BTC, signaling tightening market conditions as long‑term holders maintained their positions amid recent volatility.
Data from Glassnode revealed Bitcoin’s illiquid supply climbed steadily throughout 2024 and 2025. The metric tracked coins held by wallets unlikely to sell in the near term.
The chart showed a sharp uptick in illiquid supply during mid‑2025. This occurred as the Bitcoin price value experienced both record highs and subsequent corrections.
The divergence between price action and supply behavior indicated strong conviction among long‑term holders.
Bitcoin (BTC USD) Price Recovery Follows August All‑Time High
Bitcoin value reached an all‑time high of $124,000 on Aug. 14. The asset then corrected to a local bottom of $107,304.89 on Sept. 1, marking a 13.5 % retracement.
Despite this pullback, BTC demonstrated resilience by recovering to $117,526.84 as of press time, up 3 % in 24 hours.
Bitcoin news saw the recovery phase coincided with Bitcoin (BTC USD) value pushing above $114,000. According to Glassnode, this move triggered a wave of short liquidations.
The squeeze eliminated leveraged short positions, amplifying upside momentum as market positioning reset. The forced liquidations created buying pressure that accelerated the price bounce.
Additionally, as per Bitcoin news reports, Bitcoin dominance rebounded from 57 % to 59 % alongside price strength near $114,000. Glassnode noted that this mean reversion suggested a healthier market structure.
BTC‑led rallies historically proved more sustainable than those driven by altcoins. The rotation of capital from altcoins back to Bitcoin (BTC USD) typically preceded longer‑term bullish trends in previous market cycles.
The shift indicated investors prioritized Bitcoin’s relative safety and liquidity during uncertain conditions.
Institutional Accumulation Accelerates
Major entities continued accumulating Bitcoin at an accelerated pace. Deutsche Bank predicted central banks would add BTC to their balance sheets by 2030.
This forecast gained traction as institutional interest in Bitcoin expanded beyond corporate treasuries and investment funds.
Central bank adoption could further constrain available supply. If sovereign entities were to begin allocating even small percentages of their reserves to Bitcoin, the impact on supply‑demand dynamics would be substantial.
Countries exploring Bitcoin reserves included those seeking alternatives to dollar‑denominated assets.
In more Bitcoin news, Srategy continued its Bitcoin acquisition movement throughout 2025, surpassing 649,000 BTC. Other publicly traded firms followed similar treasury strategies, removing additional supply from liquid markets.
The combination of rising illiquid supply and potential central bank demand draws a supply squeeze scenario. With 72 % of circulating BTC already classified as illiquid, available tokens for trading represented a shrinking portion of total supply.
Exchange balances declined throughout 2024 and 2025. This metric correlated with the increase in illiquid supply.
According to Coinglass data, the Bitcoin supply available on exchanges gradually decreased from 2.83 million BTC on Oct. 12, 2023, to 2.12 million BTC on Sept. 24, 2025.
The pattern suggested accumulation rather than distribution. Bitcoin’s fixed supply cap of 21 million tokens makes these dynamics particularly relevant.
As more BTC moved into long‑term holder wallets and institutional treasuries, the marginal impact of new demand increased.
Each dollar of buying pressure has a more significant impact on the price with a reduced liquid supply.