Bitcoin Faces Supply Shortage as Demand Surges Ahead of August Slump

As of the latest update, Bitcoin has experienced a 3% decline over the past 24 hours, now trading at $85,415.74, which is approximately 7% below its all-time high reached on June 14. This downward trend raises questions about the potential extent of the decline. However, it's worth noting that within the context of an ongoing bull market, corrections of up to 10% are not uncommon, with the largest drawdown since January 2023 reaching 30%. A key technical indicator to monitor is the gap in CME Bitcoin Futures between $114,355 and $115,670, which typically occurs due to price movements outside the CME's trading hours and often gets filled as the price revisits those levels. In other developments, Strategy (MSTR) has reportedly quadrupled the size of its Stretch (STRC) perpetual preferred stock sale, with analyst Brian Brookshire pointing out that the offering includes 28 million STRC shares valued at $90 each, totaling over $2.5 billion and potentially driving demand for around 21,500 BTC at a price of $115,000. Meanwhile, on-chain data from Glassnode indicates that demand is outpacing supply, with over 210,000 BTC sold by long-term holders since the beginning of the month and approximately 250,000 BTC purchased by short-term holders. As the month-end approaches, Bitcoin is about 8% higher than at the start of the month, aligning with its historical trend of averaging a 7% return in July since 2013. Ether, on the other hand, has surged over 46% and is currently trading near $3,725, marking the third time it has topped 40% since November. Notably, in previous months where it exceeded 40%, it subsequently fell. With August typically being a quieter period resulting in lower market liquidity, it's essential to remain vigilant. Key events to watch include token events, conferences such as The CoinDesk Policy & Regulation conference, and market movements. Derivatives positioning, technical analysis, and crypto equities are also crucial aspects to monitor, alongside ETF flows and overnight market movements.