The State of The Market. March 1st 2024

The most challenging decision confronting investors now is whether to add some Bitcoin at its current levels or wait.

This question has always been difficult, but the current scenario presents unique considerations. While last year we were literally screaming about Bitcoin's undervaluation, the landscape has shifted.

On one hand, the price of $62,000 far surpasses previous forecasts and expectations predating the Halving.

Yet, evidence of genuine demand for "physical" (spot) Bitcoin persists.

The continuous and substantial acquisition of 300,000 Bitcoins by all nine ETFs since inception underscores this demand.

Across various metrics, from exchange balances to OTC dealer activity, the consensus is clear: demand outstrips supply.

For instance, see below a graph depicting the steady decline in coins held on exchanges since late 2020 illustrates this trend

And here are the OTC deck balances. They are even below the price/demand peak of the last cycle.

Note that all this is happenning pre-Halving.

The state of buy/sell balance by wallets mirrors the broader trend: demand consistently outweighs supply.

Given the substantial increase in demand, the absence of a significant correction of the BTC price isn't that surprising.

While a correction before the Halving remains a possibility, the likelihood of this appears lower compared to continuation of growth or, at the very least, consolidation above the $60K mark for Bitcoin.