Bitcoin Supply Gap
Supply Distribution Insights & Correction Signal
Dear Bitcoiners,
First and foremost, I sincerely hope you’ve had a wonderful Christmas! As we approach 2025, there’s much excitement for Bitcoin ahead. From a cycle analysis standpoint, 2025 is a year with immense upside potential. That said, volatile corrections are a natural part of the process, and we might be in the midst of one. In this newsletter, we’ll analyze Bitcoin’s supply distribution and its gaps, offering valuable insights to help you prepare for corrections and what’s to come!
Supply Distribution Insights
The chart below illustrates how much of Bitcoin’s supply is held at each price level. Each portion of Bitcoin’s circulating supply corresponds to its most recent purchase price. This visualization offers valuable insights into price levels with significant trading activity and highlights areas that were skipped over—commonly referred to as ‘gaps.’
How to Use Supply Distribution
A chart like this provides a snapshot of Bitcoin’s constantly changing supply. In previous newsletters, during the bear market, I’ve shared animated versions of these charts to analyze shifts in supply over time. However, during bull markets, animated charts are less practical due to new all-time highs introducing additional price levels. Instead, analyzing the supply distribution from the cycle peak offers a clearer perspective, helping us identify gaps in the data.
Bitcoin Supply Gaps
The chart below highlights the supply distribution measured from the 2017 cycle peak. The 2017 bull market shares many similarities with today’s bull market. Take note of the gaps in the supply distribution: around the ~$1,300 level, ~$3,000 level, and ~$5,000 level.
👇 Key Insights:
The ~$3,000 level marked the bottom of the first 30% correction during the 2017 bull market.
Later, the ~$3,000 level became the bear market bottom.
The ~$5,000 level marked the bottom of the second 30% correction during the 2017 bull market.
Subsequently, the ~$5,000 level became the COVID crash bottom.
The ~$1,300 level, however, was never filled.
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Let’s now take these insights and apply them to today’s bull market dynamics.