Stay up to date with the CriptoTendencia WhatsApp channel: Instant news about Bitcoin, Altcoins, DeFi, NFT, Blockchain and Metaverse. Subscribe!
According to on-chain analyzes by the firm CryptoQuant, the available supply of Bitcoin is in the process of rapid extinction. The prominence that the pioneering Cryptocurrency has been gaining in the enormous American market is the cause of this shortage. Thus, this scenario will inevitably lead to a sharp rise in the price of BTC.
In a recent report, the aforementioned firm highlights that massive purchases increase their rate in month-to-month terms. Meanwhile, sales-related liquidity is on a declining trend. Particularly, the latter would be at levels not seen since 2020.
It is striking that this process takes place in the midst of a context that many investors see as a buying opportunity. The bullish trend of the cryptocurrency market is in a pause in the middle of the path to the new highs expected in 2025.
The result of this context suggests that in the coming months the shortage in the supply of Bitcoin will continue to worsen. Some elements such as intense corporate purchases and the possible entry of the currency into the US strategic reserves could be decisive.
Right now, despite the fact that its price fell, Bitcoin is experiencing a demand shock, the report states. This is because demand increases disproportionately, while the currency maintains a fixed and predictable rate of issuance.
Bitcoin prepares for a demand of enormous proportions
In the event that demand exceeds the stock of bitcoins available on exchanges, a unique scenario could be generated. Obviously, the first element would be a significant increase in the price of the currency as a result of the law of supply and demand. Likewise, this would generate a huge appetite among the whales to collect profits.
In simple words, the millions of coins under the power of large wallets are capable of meeting enormous demand in the short term. However, in the longer term the limited issuance of BTC would lead to further price increases.
Thus, the increase in long-term holders would ultimately end up generating an absolute demand shock. The latter differs from the current relative shock in that there are still a large number of whales willing to provide liquidity to exchanges.
In any case, BTC’s overall bullish trend based on its limited issuance of 21 million tokens remains unchanged. In the short term, volatility will be a constant, but over longer periods of time the rise will be unequivocal.
An important aspect of this long-term equation is halvings. These cause the issuance of coins to become less and less. The latter forces the devaluation of the dollar against increasingly smaller fractions of BTC.
Related
Crypto Keynote USA
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
