River: Bitcoin's 50% Rally Is Being Driven by Supply, Not Demand

A short and shallow bear market

River said the rally has caught many investors off guard because it breaks from the pattern of previous bear markets.

If the downturn is indeed over, it was the shortest on record by nearly 100 days.

It was also the shallowest, with bitcoin falling 52% from its peak compared with drawdowns of 77% to 85% in past cycles.

The firm wrote:

“It now looks more likely that the bear market is over.”

The gains came despite a week of news that would normally weigh on the price.

The Federal Reserve raised interest rates, and the pro-crypto CLARITY Act stalled in the Senate, likely ending its chances for 2026.

Bitcoin dipped 4% on the CLARITY news before resuming its climb.

Demand hasn’t picked up

River noted that sharp price increases are usually accompanied by rising trading volume, but that hasn’t been the case this time.

Exchange trading volume is 30% lower than at the start of the year, and bitcoin ETFs have bought about 18,000 BTC so far this month, below their monthly average since launching in 2024.

“If demand isn’t driving this rally, it means this price action is supply-driven.”

Coins moving to long-term holders

Bitcoin has a fixed supply of 21 million coins, and more than 20 million are already in circulation.