Crypto analyst Murphy said on July 28 that Bitcoin’s spot supply concentration within a 5% price range has kept rising, moving from 10% in May to 12% at present. The figure remains below the 15% threshold he flagged as critical, but it is already above the level that preceded a sharp bout of volatility in May.
Higher concentration can make price moves more explosive
Murphy said the mechanism is straightforward: when too much supply is packed into a narrow price band, even a small move can accelerate turnover among more sensitive holders, which can then produce larger volatility.
Historical data cited by Murphy shows that when concentration rises above 15%, the probability of a major move increases. He pointed to two past readings: 18% in November 2025 and 16% in January 2026.
Post-February market conditions look different
According to Murphy, the price drop after February this year triggered a diminishing marginal effect on the supply side. A long stretch of low circulation and low turnover meant supply concentration no longer stood out as strongly as it had in previous periods.
Still, the market saw a large swing in May with concentration at only 10%. In Murphy’s view, that suggests market sentiment has become more fragile and less stable than before.
Sideways trading in the $62,000-$66,000 range could set up the next break
Murphy said that if BTC continues to move sideways between $62,000 and $66,000 for some time, supply concentration will keep building. He expects that process to end with a forceful breakout either upward or downward, allowing the overly concentrated supply to be redistributed.
He added that this could mark an important directional decision near the end of the current bear market cycle. Murphy also said the 5% spot supply concentration metric has helped identify volatility direction at several key moments in the past, and the current rebound in the indicator suggests the market is moving closer to its next window for a sharp repricing.