Bitcoin's price has faced sharp fluctuations this week, reaching $108,000 before plunging to $95,243.24.
Major firms like MicroStrategy and MARA Holdings continue accumulating Bitcoin, depleting the circulating supply.
Analysts anticipate a Bitcoin supply shock, with prices likely to recover as the market reacts to institutional buy-ups.
This week, Bitcoin saw sharp price fluctuations, hitting an all-time high of $108,000 before falling to $95,587.68. Despite the record-breaking peak, the cryptocurrency's inability to maintain support above $100,000 has sparked concern among traders and investors.
Surge in Institutional Buy-Ups
Several pro-Bitcoin firms have amplified their purchasing activities, adding to the coin's scarcity. MicroStrategy recently acquired an additional $1.5 billion worth of Bitcoin, boosting its total holdings to 439,000 BTC. Additionally, MARA Holdings and other companies with significant Bitcoin treasuries announced major purchases. This activity has substantially reduced the coin's circulating supply, yet its price remains volatile.
Samson Mow, a prominent Bitcoin advocate, addressed the market's current dynamics in a recent post. According to Mow, the limited Bitcoin supply and increasing demand have not yet been reflected in the price due to irrational market behavior. He emphasized that such conditions often precede a significant supply shock, which could trigger a price recovery.
https://twitter.com/Excellion/status/1869953229213315168
Imminent Supply Shock Expected
The anticipation of a supply shock has been fueled by consistent institutional accumulation. Historically, announcements of large Bitcoin purchases have led to market adjustments, often aligning with the average acquisition prices of these firms. Analysts predict a similar trend in the coming weeks, with the market rebalancing ahead of potential new buy-up announcements.
As of now, Bitcoin's price has dropped 3.54% in the past 24 hours, trading at $95,243.24. Despite the ongoing decline, the cryptocurrency has established strong support around this level over the past month. Investors are closely monitoring the market for signs of recovery, which could be imminent given the current scarcity of available Bitcoin.
