According to Glassnode, 78% of all Bitcoin in circulation is on cold wallets. Glassnode analysts have noted that the metrics used to calculate Bitcoin's potential liquidity take into account how many Bitcoins remain to be mined and how many Bitcoins have potentially been lost over the past decade.
If lesser Bitcoin tokens are available for a growing audience, the selling pressure drops as more investors want to stick to their cryptocurrency. This can result in an increase in demand for the cryptocurrency, as well as demand. Since the supply of bitcoin is limited and mining offers a smaller reward after halving, generating more bitcoins is difficult.
Over the past year, it has been noticed that Bitcoin has experienced a tremendous increase in investor interest and price. This came as a result of a global hedge against the economy that had suffered from the pandemic. However one of the main factors of growth in the value of Bitcoin is a strong sentiment when institutional firms buy Bitcoin. Large-scale whales and institutional investors such as Grayscale, MicroStrategy and Square are pointing to a new wave of Bitcoin holders. This shift represents a long term "holding" strategy rather than market volatility.