And Ethereum topped $750...

While catalysts are manifold and much-discussed, CoinTelegraph's Joseph Young notes that Bitcoin liquidity is declining, data from Glassnode shows, which could propel BTC price even higher.

Bitcoin is becoming more difficult to buy, according to analysts at Glassnode. The amount of BTC received and spent among entities is decreasing, which means the liquidity is declining.

If Bitcoin liquidity is low, it means there is less BTC available to buy and sell. In the medium term, this could make BTC even more scarce.

Bitcoin on track for an explosive 2021

Throughout 2020, institutions have been increasingly accumulating Bitcoin, which has become compelling because of its fixed supply.

In recent months, the concerns about inflation and rising central bank liquidity have intensified. This trend has led high-profile institutional investors, like Paul Tudor Jones, to consider Bitcoin as a potential hedge against inflation.

Meanwhile, a trend that was kickstarted by MicroStrategy's $425 million Bitcoin purchase in the summer spilled over to other financial giants. Eventually, PayPal, Square and even insurance conglomerates like MassMutual stepped into the fray.

Consequently, the institutional accumulation of Bitcoin has accelerated since. As a result, Glassnode found that only 4.2 million BTC are in constant circulation for buying and selling. The firm wrote:

"Bitcoin liquidity is defined as the average ratio of received and spent BTC across entities. We show that currently 14.5M BTC are classified as illiquid, leaving only 4.2M BTC in constant circulation that are available for buying and selling."