Bitcoin’s sustained price strength through 2024 is driven primarily by acute market supply scarcity, compounded by institutional demand channeled through Spot Exchange-Traded Funds (ETFs), as whale accumulation significantly reduces circulating supply.
Market analysis indicates a persistent supply shortage on centralized exchanges, evidenced by consistent negative exchange netflows. This outflow signals ongoing depletion of immediately available Bitcoin, creating a structural constraint against rapid selling pressure.
The scarcity is underscored by Bitcoin’s escalating Stock-to-Flow (S2F) ratio, which has surged to a substantial 369,400 BTC ratio. This metric highlights a significant reduction in new supply relative to its existing stockpile, a factor strongly associated with potential long-term price appreciation in economic models.
Whale entities have played a dominant role in market dynamics, orchestrating significant withdrawal campaigns off exchanges. Recent movements involving substantial amounts (-73k BTC attributed broadly, including a -19k BTC subtraction attributed to mega-whale tier wallets) actively removed liquidity from trading venues.
Simultaneously, the massive influx of institutional capital into US Spot Bitcoin ETFs has intensified the supply squeeze. Holdings across approved funds now exceed a formidable 1.3 million Bitcoin, representing a substantial locked-up value of approximately $149 billion.
This convergence of institutional ETF demand and aggressive whale accumulation provides strong underlying support for the market. Experts suggest the rally’s sustainability hinges on the continuation of these demand pressures. Should current trends hold, Bitcoin has the potential to challenge significant historical resistance levels, potentially encountering barriers near $117,000.