When the demand for an asset increases moderately while the supply remains constant, a shortage occurs. This shortage happens because more participants want to build position in the asset than there are units available. As a result, the price of the product tends to rise. This price increase is a natural response to the higher demand, as sellers can charge more due to the limited availability of the product.

Key Points:
• Moderate Increase in Demand: More participants want to build position in the asset, but the increase is not drastic.
• Constant Supply: The number of available units does not change.
• Shortage: The demand exceeds the supply, leading to a scarcity of the asset.
• Price Increase: Due to the shortage, sellers raise the price, as market participants are willing to pay more to obtain the asset.

When there is a moderate increase in demand for an asset, but the supply remains unchanged, it creates a situation where the available quantity is insufficient to meet the higher demand. This imbalance between supply and demand leads to a shortage. As a result, the scarcity of the asset causes its price to rise, as market participants are willing to pay more to obtain it. This price increase continues until the market reaches a new equilibrium where supply matches the heightened demand.