Bitcoin Illiquid Supply Signals a Scarcity-Driven Outlook

Long‑term holders are accumulating and locking away supply, reducing liquidity available for sale. A growing share of supply sits in wallets held for years, which can dampen selling pressure during drawdowns and support a rebound when demand returns. The Fidelity forecast adds a narrative of persistent scarcity, driven by corporate treasuries and ETF allocations, which could sustain upside even in choppy markets. However, the forecast hinges on continued demand from institutions and the absence of catalysts that could unlock supply (e.g., ETF approvals, regulatory changes). The setup aligns with a macro risk-on environment for crypto when liquidity is tighter and risk sentiment improves, but it depends on continued trust in BTC’s role as a long‑duration asset and store of value rather than a with‑risk, high‑beta equity proxy.