The post Why Bitcoin’s Price No Longer Follows Simple Supply and Demand appeared on BitcoinEthereumNews.com.

Bitcoin Bitcoin’s latest selloff is confusing a lot of investors because it does not look or behave like a classic supply-and-demand market move. Key Takeaways Bitcoin’s current drop is being driven by market structure rather than retail fear or on-chain selling pressure. Synthetic exposure from futures, options, ETFs, and lending has diluted the impact of Bitcoin’s fixed supply on price discovery. As derivatives dominate trading, price movements increasingly reflect liquidation flows and positioning instead of pure demand. Prices keep sliding even as long-term holders remain relatively inactive and there is no obvious surge in retail panic. That disconnect is exactly the point. What is playing out now is not a sentiment-driven correction, but the result of a deeper structural change in how Bitcoin’s price is formed. Why this selloff feels different The current decline did not begin with a single headline or sudden shock. It has been building quietly for months as trading activity increasingly shifted away from the blockchain itself and into layered financial instruments. In this environment, Bitcoin’s price is no longer primarily discovered through spot buying and selling. Instead, it is increasingly shaped by positioning, hedging strategies, and forced liquidations inside derivatives markets. From digital scarcity to synthetic supply Bitcoin’s original valuation logic rested on two pillars: a fixed supply of 21 million coins and the idea that each coin could not be duplicated or reused. That framework started to weaken once traditional financial infrastructure wrapped itself around the asset. Cash-settled futures, perpetual swaps, options, exchange-traded products, lending desks, and synthetic exposures all introduced ways to gain Bitcoin price exposure without owning actual coins. The result is a form of synthetic supply. While the number of coins on-chain remains capped, the number of price claims linked to Bitcoin is not. One real coin can now underpin multiple…

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Filed under: News - @ February 7, 2026 6:16 am