Bitcoin Correction ‘Increasingly Unlikely,’ Says 21Shares Amid Historic Supply Crunch

Bitcoin Remains Bullish Despite Seasonal Weakness

Bitcoin (BTC) may be trading below its recent all-time high, but according to 21Shares, the odds of a prolonged correction are growing slimmer. In a recent interview, Matt Mena, crypto research strategist at the firm, pointed to a “structural imbalance” between surging demand and historically low supply.

“There are far more positives than negatives right now,” Mena told Cointelegraph. “The structural imbalance between surging demand and a rapidly vanishing supply base makes a prolonged correction increasingly unlikely.”

Bitcoin Supply Hits Record Lows on Exchanges and OTC Desks

Mena emphasized that both exchange-held and over-the-counter (OTC) Bitcoin reserves are at all-time lows — while demand from institutional and retail channels continues to climb.

This aligns with recent insights from Bitfinex, which noted that buyers now entering the market appear price-agnostic, rapidly absorbing BTC at a pace faster than miners can produce.

“US-listed Bitcoin ETFs have already absorbed several multiples of the BTC that will be mined this year,” Mena added, highlighting that corporate treasuries are also quietly accumulating.

Bitcoin is up 11.62% over the past 30 days. Source: CoinMarketCap

Related: BlackRock’s Crypto ETF Inflows Soar 370% in Q2 2025 Despite Overall Slowdown

Retail Investors Still Absent — But That Might Be Bullish

Interestingly, the current bull run is unfolding with minimal participation from retail investors. Bitwise's head of research André Dragosch noted that Google search interest for “Bitcoin” remains low, even as BTC hits record highs.

“Bitcoin is at new all-time highs, but retail is almost nowhere to be found,” Dragosch said.

This could suggest the rally is being driven primarily by institutional inflows, a dynamic that might extend Bitcoin’s upside once retail demand eventually kicks in.

Macro Risks Still a Threat to Short-Term Price Action

While fundamentals look strong, Mena cautioned that macroeconomic headwinds could still impact Bitcoin’s trajectory in the short term.

“It is certainly possible that Bitcoin consolidates, or even sees a pullback,” he said, identifying two key risks:

• Escalation of Trump’s proposed tariffs

• A more hawkish stance from the Federal Reserve, particularly if Jerome Powell delays rate cuts

These scenarios could lead to a broader repricing of risk assets, including crypto.

Outlook: Q3 May Defy Historical Weakness

Traditionally, Q3 has been Bitcoin’s weakest-performing quarter, averaging just 6.32% returns since 2013, according to CoinGlass. But 21Shares believes this cycle could break from that pattern.

“What’s truly remarkable is that Bitcoin is setting new all-time highs during the most illiquid, seasonally weak part of the year,” Mena said.

“Once summer ends and liquidity returns, we expect upside momentum to resume.”

Key Takeaways

• BTC Supply is at Record Lows: Both exchange and OTC reserves are historically low.

• Demand Outpaces Supply: ETFs and corporate buyers are absorbing Bitcoin faster than it's mined.

• Retail Hasn’t Arrived Yet: Google Trends show low interest, but that may fuel the next leg up.

• Macro Risks Remain: Rate policy and tariffs could cause short-term volatility.

• Unusual Q3 Strength: Bitcoin is defying seasonal trends with new all-time highs during summer.

BTC Price Update

As of publication, Bitcoin is trading at $117,804, down slightly from its record high of $122,884 reached earlier this week.

Related: Bitcoin Price Correction Looms as Whales Dump BTC and CME Gap Targets $114K