Bitcoin Hits $120,000 All-Time High on Supply Squeeze, Institutional Inflows

Bitcoin surged to an unprecedented high of $120,000 on Sunday night, marking a significant milestone in its price trajectory. This new all-time high follows a week of consistent gains, driven by a confluence of factors including on-chain trends, increased institutional involvement, and a more favorable regulatory outlook. The cryptocurrency had previously broken through the $119,000 mark earlier in the day.

The recent rally in Bitcoin's price can be attributed to several key developments. Long-term holders are currently absorbing more Bitcoin than miners are issuing, creating a structural supply squeeze. Wallets holding less than 100 BTC have been accumulating around 19,300 BTC per month, while monthly miner issuance stands at just 13,400 BTC. This persistent net absorption across a broad base of holders is contributing to a measurable supply-side tightening, which could further support upward price momentum.

Institutional participation has also played a crucial role in Bitcoin's recent gains. US spot Bitcoin ETFs accumulated over $2.7 billion in net inflows this week, with daily inflows exceeding $1 billion on both Thursday and Friday. This influx of capital has been driven by major players in the investment landscape, with BlackRock’s iShares Bitcoin Trust (IBIT) recording more than $1.7 billion in inflows over seven days.

Optimism surrounding Bitcoin's future is also bolstered by regulatory developments. The upcoming "Crypto Week" is seen as a potential turning point for the crypto sector, with expectations of more supportive legislation on the horizon. This regulatory clarity could further fuel investor confidence and drive additional capital into the market.

Experts project continued volatility in the near term, but the overall sentiment remains bullish. The combination of structural supply constraints, institutional inflows, and regulatory optimism suggests that Bitcoin could continue to reach new all-time highs in the coming months. As the market evolves, investors will be closely monitoring these developments to capitalize on the opportunities presented by this dynamic asset class.