- BTC inventories at OTC desks declined by 26,000 BTC in December, observing the biggest monthly decline of 2024.
- BTC’s price surged from $40,000 to $74,000 in Q1 2024 as demand accelerated and inventory levels tightened.
- Reduced supply at OTC desks is boosting competition among buyers, driving market and trading activity.
The demand for Bitcoin has reported a surge as over-the-counter (OTC) desks read a reduction in their inventory. The largest monthly drop of 2024 has been recorded, with a reduction of 26,000 BTC in December alone.
Shrinking OTC Desk Inventories
Data from the past month shows a depletion of Bitcoin reserves held by OTC desks. These desks, often utilized by institutional and high-net-worth investors for large-scale transactions, are showing their lowest levels of inventory this year.
According to Crypto Quant, BTC rose from $40,000 to $74,000 in Q1 2024 as demand increased. The OTC desk inventory balance showed declines, dropping by 26,000 BTC in December.
Source: Crypto Quant
Over the year, the 30-day OTC balance change correlated with Bitcoin’s price fluctuations. Notably, inventory levels sharply decreased when Bitcoin reached higher price points, signalling increased demand.
The 26,000 BTC drop in December represents the largest monthly decline in OTC inventory this year. This sharp reduction shows the increasing pace at which Bitcoin is being absorbed from OTC platforms, leaving fewer coins available for potential buyers.
Impacts on Market Supply
The falling inventory levels have begun to tighten Bitcoin’s circulating supply, a factor often associated with increased price momentum. OTC desks play a crucial role in absorbing liquidity and providing stability during high-demand periods. With inventories declining rapidly, the available supply for large-scale transactions is diminishing, intensifying competition among buyers.
Such supply constraints have historically contributed to market price shifts. The current scenario of shrinking reserves could influence short-term trading dynamics and long-term valuation trends.
Market participants have observed a notable acceleration in Bitcoin’s market momentum in recent weeks. This growth aligns with the inventory reductions seen at OTC desks, suggesting a direct correlation between declining supply and heightened trading activity. The increased demand, coupled with reduced availability, is setting the stage for potentially significant market developments.
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