Bitcoin price has seen extreme fluctuations this week, making headlines with its brief rally to a new all-time high (ATH) above $108,000 on December 18, 2024, only to drop as low as $93,111.68 as of writing this.
Amid this dramatic price action, institutional investors have continued their buying spree, with significant accumulation from top pro-Bitcoin firms.
Despite this, Bitcoin price has failed to sustain its gains, leading industry veteran Samson Mow to weigh in on the situation.
Mow explained that a Bitcoin supply shock is on the horizon, urging investors to trust their instincts.
Bitcoin Reaches ATH, Then Faces a Sharp Decline
Bitcoin’s bullish surge to $108,000 on December 18 marked a historic high, but this momentum quickly fizzled out.
By December 20, the price had fallen back to $93,111.68, showing a drop of approximately 13.8%.
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This sharp reversal underscores the volatility that continues to define Bitcoin price movements.
The decline came despite massive institutional purchases, most notably from MicroStrategy. The business intelligence firm recently acquired an additional $1.5 billion in Bitcoin, raising its total holdings to a staggering 439,000 BTC.
Other firms with Bitcoin treasuries, including MARA Holdings, have also joined the buying frenzy.
These large-scale purchases have drained a significant portion of Bitcoin’s circulating supply, leading to growing concerns about market behavior in the face of such scarcity.
Samson Mow’s Take: A Supply Shock Is Coming
In response to the ongoing price drop, Samson Mow took to X (formerly Twitter) to address why Bitcoin price has continued to fall despite intense accumulation.
Mow stated,
“I often see people asking the question ‘if everyone is buying and there’s no supply, then why is the price going down?’ It’s just the market behaving irrationally with what limited #Bitcoin supply is left. Trust your instincts. The supply shock is coming.”
Mow’s words highlight the core issue facing Bitcoin’s market: the total supply of Bitcoin is capped at 21 million, and as more institutional investors continue to acquire Bitcoin, less remains available for the broader market.
Mow is confident that the limited supply will eventually trigger a supply shock, pushing prices higher once the market reacts to the scarcity.
The ongoing accumulation trend suggests that institutional players are positioning themselves for future gains.
MicroStrategy, for example, has made several major Bitcoin purchases in recent weeks.
Each time the company announces a new purchase, market traders typically adjust their pricing to reflect MicroStrategy’s average purchase price.
While the current market has seen prices retract, this pattern indicates that more institutional buying could be on the horizon, potentially leading to price rebalancing.
However, despite the accumulation, Bitcoin price has not managed to sustain the gains above $100,000. As of December 20, Bitcoin price fell below $95,000.
What’s Next for Bitcoin?
Samson Mow’s forecast of an impending supply shock suggests that the current market conditions may be temporary.
Mow urges investors to remain patient, as the ongoing accumulation by institutional investors will eventually result in a price surge when the supply shock takes hold.
