This week was one of two distinct halvings for Bitcoin’s price, with the flagship cryptocurrency rising to a new all-time high and falling about 13% a few days later. On Friday, December 20, the price of Bitcoin fell to a low of $92,000.
This sudden drop in Bitcoin prices came after an interest rate cut by the US Federal Reserve, which also pushed other financial markets into the red zone. However, it is worth noting that the leading cryptocurrency is starting to show signs of recovery, as it is currently hovering around $97,000.
Could increased demand push Bitcoin price above $100,000?
In a recent report released on December 20, market analytics platform CryptoQuant open An interesting on-chain development with Bitcoin supply and demand dynamics. According to the blockchain company, the BTC market appears to be enjoying renewed interest from investors.
The relevant indicator here is the Total Over-the-Counter (OTC) Desk Balance, which tracks the amount of Bitcoin held at addresses linked to over-the-counter (OTC) desks. This metric provides insight into BTC supply easily to large investors and institutional players.
According to data from CryptoQuant, OTC desks are seeing the largest monthly decline in their inventory of 2024, falling by more than 26,000 BTC so far in December. This decline has been even more significant in the past 30 days, with the balance falling by 40,000 BTC since November 20.
This decrease in the total OTC desk balance is a bullish sign, reflecting the increasing demand for Bitcoin and the concurrent contraction of supply. Typically, a shrinking supply of Bitcoin on the open market can set the stage for a period of significant price increases.
CryptoQuant noted that Bitcoin’s price rose from $40,000 to around $74,000 in the first quarter of 2024 after demand growth caused over-the-counter office inventories to decline. According to Market Intelligence, OTC stock is starting to approach levels seen during the first quarter rally.
Data from CryptoQuant shows that apparent demand for Bitcoin is currently growing at a monthly rate of 228,000 BTC after entering an expansion zone in late September. Meanwhile, the balance of accumulator addresses is swelling at a record rate of 495,000 BTC per month.
Bitcoin price at a glance
As of this writing, Bitcoin’s price is around $97,655, reflecting a 0.1% decline over the past 24 hours. The leading cryptocurrency fell nearly 4% on the weekly time frame, according to data from CoinGecko.
Featured image created by DALL-E, chart from TradingView
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