According to a well-known crypto analyst, the fundamental principles of supply and demand are poised to work in favor of Bitcoin (BTC). Ali Martinez, a trader with a following of 62,300 on the social media platform X, explains that the market became flooded with Bitcoin after the top cryptocurrency reached an all-time high of over $73,700 in March, resulting in most long-term holders making profits.

As a result of the surplus supply of BTC on the market exceeding demand levels, there was a corrective phase that caused the price of Bitcoin to drop below $57,000. This decline led to Bitcoin falling below its Short-Term Holder Realized Price, which created fear in the market since short-term holders are more likely to sell due to price volatility.

Despite these concerns, the Short-Term Holder Realized Price, which currently stands at $60,500, served as an accumulation point for investors. In fact, long-term holders felt confident enough to add over 70,000 BTC to their positions at these levels after realizing profits in March.

The realized price refers to the average price of Bitcoin in circulation, calculated based on the price at which they were last moved. The short-term holder realized price, on the other hand, represents the average acquisition price of all the Bitcoin acquired within the past 155 days.

Martinez predicts that the demand for Bitcoin will soon surpass the supply. He supports this claim by observing Bitcoin’s Balance on Exchanges, which indicates the supply and demand dynamics. Since early May, more than 30,000 BTC have been moved to private wallets for long-term holding, demonstrating the confidence that holders have in Bitcoin’s future value.

At the time of writing, BTC is trading at $65,411.

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