This week was one of two distinct halves for the price of Bitcoin, with the premier cryptocurrency rising to a new all-time high and dropping by about 13% a few days later. On Friday, December 20, the BTC price dropped to as low as $92,000.
This abrupt Bitcoin price decline came following the US Federal Reserve’s rate cut, which also pushed other financial markets to the red. However, it is worth mentioning that the premier cryptocurrency is beginning to show signs of recovery, currently hovering around $97,000.
Can Growing Demand Push BTC Price Back Above $100,000?
In a recent December 20 report, market analytics platform CryptoQuant revealed an interesting on-chain development with the Bitcoin supply-demand dynamics. According to the blockchain firm, the BTC market seems to be enjoying renewed investor interest.
The relevant indicator here is the Total OTC Desk Balance, which tracks the amount of Bitcoin held in addresses associated with Over-The-Counter (OTC) desks. This metric provides an insight into the supply of BTC readily to large investors and institutional players.
According to data from CryptoQuant, the OTC desks are witnessing their largest monthly inventory decline of 2024, declining by over 26,000 BTC so far in December. This decline has been even more significant in the past 30 days, with the balance dropping by 40,000 BTC since November 20.
This decline in the Total OTC Desk Balance is a bullish indicator, which reflects the soaring demand for Bitcoin and the concurrently shrinking supply. Typically, the contracting BTC supply on the open market could set the stage for a period of significant price appreciation.
CryptoQuant noted that the price of Bitcoin rallied from $40,000 to around $74,000 in the 2024 first quarter after demand growth caused the Over-The-Counter desks’ inventories to fall. According to the market intelligence, the OTC desk’s inventory is beginning to near the levels seen during the first-quarter rally.
Data from CryptoQuant shows that Bitcoin’s apparent demand is currently growing at a monthly rate of 228,000 BTC after entering the expansion territory in late September. At the same time, the balance of accumulation addresses is swelling at a record-high rate of 495,000 BTC per month.
Bitcoin Price At A Glance
As of this writing, the price of Bitcoin stands at around $97,655, reflecting a 0.1% decline in the past 24 hours. The premier cryptocurrency is down by nearly 4% on the weekly timeframe, according to data from CoinGecko.
Featured image created by DALL-E, chart from TradingView