Analysts suggest that this increased demand by whales has continued to outstrip supply, driving the continued price metric surge. Some have expressed concerns that a huge supply crunch will likely occur if this momentum continues.
Notably, a market supply crunch happens when more investors buy an asset amid a limited supply. For context, Bitcoin has a limited supply of 21 million BTC, and its scarcity is one key factor in driving value.
Additionally, only 450 BTC are mined daily. Hence, the total Bitcoin mined within 48 hours is just 900 BTC, which is insignificant in meeting the demand of Bitcoin whales.
Such a scenario of reduced supply mixed with steadily increased demand can push prices higher.
Martinez suggests that the Bitcoin market is gearing up for further upward movement due to an impending reduction in supply. Meanwhile, institutional players have also increased their demand for Bitcoin recently.
However, the unpredictability of the crypto market might change things. The macroeconomic factors fueling the increased demand for BTC could change and leave whales losing their appetite for more accumulation. The coming days signal which way the market trend will swing.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com
