Bitcoin Demand On The Rise Again — What’s Happening?
This week saw one of two different halves for Bitcoin price, with the major cryptocurrency rising to all time high It dropped by about 13% a few days later. On Friday, December 20, BTC price dropped to $92,000.
The sudden drop in Bitcoin prices comes after the Federal Reserve cut interest rates, which also led to losses in other financial markets. However, it is worth mentioning that the premier cryptocurrency is starting to show signs of recovery and is currently hovering around $97,000.
Could growing demand push BTC price back above $100,000?
In a recent report on December 20, market analytics platform CryptoQuant disclose Interesting on-chain developments in Bitcoin supply and demand dynamics. The Bitcoin market appears to be experiencing renewed investor interest, according to the blockchain company.
The relevant metric here is the total OTC counter balance, which tracks the amount of Bitcoin held in addresses associated with over-the-counter (OTC) counters. This indicator allows large investors and institutional players to easily understand the supply of BTC.
According to data from CryptoQuant, OTC desks are witnessing their largest monthly inventory declines in 2024, having lost over 26,000 BTC so far in December. The decline has been more significant over the past 30 days, with the balance having fallen by 40,000 BTC since November 20.
The decline in total OTC desk balances is a bullish indicator, reflecting surging demand for Bitcoin and simultaneous shrinking supply. Typically, a contraction in Bitcoin supply on the open market could set the stage for a period of significant price increases.
Crypto quantization noted that Bitcoin prices rose from $40,000 to around $74,000 in the first quarter of 2024 after rising demand led to a decline in OTC desk inventories. According to market intelligence, inventories on OTC desks are starting to approach levels seen during the first-quarter rebound.
Data from CryptoQuant shows that apparent demand for Bitcoin is currently growing at a rate of 228,000 BTC per month since entering expansion territory in late September. At the same time, cumulative address balances are swelling at an all-time high of 495,000 BTC per month.
Bitcoin Price at a Glance
As of this writing, Bitcoin is trading at around $97,655, down 0.1% in the past 24 hours. The major cryptocurrency is down nearly 4% on a weekly basis, according to CoinGecko.
Featured image created by DALL-E, chart from TradingView
