I have read few posts of persons talking about losing their wallet's containing BTC and couldn't recover it at all. Hence, as people keep losing their BTC due to loss of wallet seed phrase, can it affect or cause a decline in BTC supply entirely?
Cannot give any effect if we talk about prices changes since the balance will just sleep with no transaction will happen. But if there's movement like dumping it especially if this is a huge balance then maybe a short time dump of the price will happen.
But it can lessen up the supply and we don't know yet what will be the real effect on it especially if many people will want more bitcoin and supply is to low. Maybe we can see price goes up then it will be expensive for other people to acquire some amount of it.