Bitcoin price eyes ATH as traders brace for a “supply shock”
Bitcoin price could be about to blast to a record high as traders brace for a ‘supply shock’ in the coming months.
Bitcoin (BTC) has remained rangebound this week but at $104,000 it needs to gain around 4% to match its all-time high of $109,300.
One major bullish catalyst for Bitcoin is the sharp decline in available supply across centralized exchanges and over-the-counter desks. According to CryptoQuant, sell-side liquidity on OTC desks has dropped to 120,000 BTC, its lowest level in years. For comparison, inventory stood at nearly 500,000 BTC in late 2021.
Similarly, data shows that Bitcoin’s supply on centralized exchanges such as Binance and Coinbase has fallen to 2.17 million BTC, down from 2.72 million in January 2024. This marks the lowest exchange supply in over six years.
This shrinking supply is viewed as a bullish indicator, especially amid rising demand. For instance, spot Bitcoin ETFs have added over $40 billion in assets since January last year.
Companies are also continuing to buy Bitcoin, with Strategy leading the way. Strategy now holds 568,500 coins worth $59 billion. It holds about 2.7% of all Bitcoins that will ever be created. Other companies like Next Technology, Semler Scientific, Cango, and MetaPlanet have continued buying.
More companies will likely add Bitcoin into their treasuries after observing Strategy’s success. Its market cap has jumped to over $115 billion, up from $1 billion when it started buying in 2020.
In addition to institutions, the next phase of Bitcoin accumulation will likely come from governments. Donald Trump has proposed the creation of Strategic Bitcoin Reserves, a move that may push other countries to do the same. Ukraine and the Czech Republic have started exploring these assets.
Bitcoin price technical analysis
The daily chart shows Bitcoin consolidating around $104,000 in recent days. Technically, this price action forms part of a bullish pennant pattern, a continuation setup typically seen in strong uptrends. This consolidation is occurring just below resistance at $108,420, which marks the upper boundary of a larger cup and handle formation.
Bitcoin’s rally is also supported by the 50-day and 100-day Exponential Moving Averages, both trending upward. This alignment suggests continued bullish momentum, with the all-time high of $109,300 firmly in sight. A break above that level could pave the way for further gains toward the psychological barrier at $110,000.
