Even retail demand is now outpacing Bitcoin supply: Bitfinex

New buyers entering the Bitcoin market are seen as price-agnostic and are scooping up the cryptocurrency faster than miners can supply, a likely boon for the price of Bitcoin. 

“Currently, the combined balance of these cohorts is expanding at a rate of approximately 19.3K BTC per month,” Bitfinex analysts said in a markets report on Monday.

Smaller Bitcoin investors “relentlessly accumulating”

The analysts pointed out that the Shrimp (<1 BTC), Crab (1–10 BTC), and Fish (10–100 BTC) Bitcoin (BTC) holder groups are growing their Bitcoin portfolio much faster than the current monthly issuance rate, which has been around 13,400 BTC since the April 2024 halving.

“Demand from this segment alone is more than enough to absorb all new supply,” they said, adding that they are consistently buying no matter the price:

“This cohort-level accumulation trend supports the broader bullish narrative that new buyers entering the Bitcoin market are price-agnostic buyers and are relentlessly accumulating with limited intervals.”

The aggressive accumulation comes as Bitcoin continues to set new all-time highs. On Monday, Bitcoin reached a new all-time high of $122,884 before retracing to $119,860 at the time of publication, according to CoinMarketCap data.

Despite the bullish momentum, some warn of potential volatility ahead. 

Redstone co-founder Marcin Kazmierczak told Cointelegraph that while many crypto analysts are now calling for short-term Bitcoin targets as high as $140,000, “history teaches us that parabolic moves often invite sharp corrections.”

Rising sentiment “warrants careful position sizing”

Kazmierczak pointed to the large number of leveraged positions wiped out in the past 24 hours as a reminder that “volatility remains Bitcoin’s constant companion.” 

Nearly $430 million in Bitcoin shorts were liquidated as the price surged past $121,000, according to CoinGlass data.

He said investors should approach upcoming Bitcoin price milestones with caution, not euphoria, warning that rising sentiment “warrants careful position sizing.”

The Crypto Fear & Greed Index, which measures overall market sentiment, posted a “Greed” score of 74 on Monday, marking the fifth consecutive day in Greed.

Santiment analyst Brian Quinlivan recently warned that while rising sentiment may seem positive, similar spikes in trader optimism were followed by Bitcoin price drops on both June 11 and July 7.

Meanwhile, crypto trading firm QCP Capital said, “Bitcoin’s relentless rally shows no signs of fatigue, surging past $122K as momentum accelerates.”

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.