Strong demand, dwindling supply, and ETF appetite push BTC past $122K even in illiquid markets
With Bitcoin recently breaking above $122,000, one of the industry’s most closely watched research firms says the odds of a prolonged correction are growing increasingly slim.
According to Matt Mena, crypto research strategist at 21Shares, Bitcoin is currently experiencing a “structural imbalance” — a market condition where demand is rising while available supply hits record lows.
“There are far more positives than negatives right now,” said Mena in an interview with Cointelegraph.
Bitcoin Supply Hits Historic Lows
Bitcoin supply on both centralized exchanges and over-the-counter (OTC) desks is sitting at all-time lows, while buying pressure continues to rise, according to Mena.
“On the supply side, the fundamentals remain even more skewed,” he said.
Bitcoin climbed to a new all-time high of $122,884 on Monday, just days after surpassing its previous record of $111,970 on July 9. It is trading at $117,804 at the time of publication, according to CoinMarketCap.
Meanwhile, analysts at Bitfinex say new market entrants are “price-agnostic”, meaning they are acquiring Bitcoin faster than miners can replenish it.
Retail Investors Missing in Action
Despite the price surge, retail participation remains muted, according to Bitwise head of research André Dragosch, who noted a sharp decline in Google search interest for “Bitcoin.”
“Bitcoin is at new all-time highs, but retail is almost nowhere to be found,” Dragosch said.
This phenomenon could suggest the current rally is being driven by institutional investors, ETFs, and corporate treasuries, rather than speculative retail demand.
Bitcoin ETFs Absorbing Supply Faster Than It’s Created
In the first half of 2025, U.S.-listed Bitcoin ETFs have already absorbed several multiples of the BTC that will be mined this year, according to Mena.
“That doesn’t even include corporate treasury buyers, who continue to add quietly in the background,” he added.
Macro Risks Still Loom
Despite the strength of Bitcoin’s fundamentals, Mena acknowledges that macro conditions could shake things up.
“If Trump’s proposed tariffs end up being more severe than markets currently anticipate, or if [Fed Chair Jerome] Powell signals that rate cuts are further off than expected, we could see risk assets broadly reprice lower, including Bitcoin,” he warned.
Even so, Mena says an extended drawdown is “unlikely” over the next six months.
“Once summer ends and liquidity returns, we expect upside momentum to resume.”
Rally Defies Seasonal Weakness
What’s unusual — and telling — about this current rally is that it’s unfolding during Bitcoin’s historically weakest quarter.
Since 2013, Q3 has averaged just a 6.32% return, according to CoinGlass data.
Share This“Historically, summer is when markets stagnate — traders are on holiday, volume dries up, and price action flattens,” Mena said. “But this cycle is defying that norm.”
