- Bitcoin is experiencing an increase in institutional demand.
- OTC agencies see their largest monthly inventory drop for 2024 at 26,000 BTC.
After falling to a 2-week low of $92,118 over the past day, Bitcoin’s [BTC] has shown resilience and made a significant recovery.
BTC has recovered from the market crash and has reached a high of $98,125. However, there has been a slight setback. At the time of writing, Bitcoin was trading at $98,086, up 1.25% from the past day.
This market strength is largely attributed to the increased demand BTC is experiencing, especially among institutions, according to Cryptoquant’s analysis.
Rising institutional demand for Bitcoin
In their analysis Cryptoquant noted that demand for Bitcoin is rising. According to them, OTC desks are experiencing the largest monthly inventory decline of 2024. This is currently down by 26,000 BTC tokens this month alone.
Source: CryptoQuant
Since November 20, 2024, Bitcoin supply has fallen by 40,000 BTC, indicating an ongoing supply squeeze.
The significant drop in supply indicates increased institutional demand for Bitcoin. Current market conditions position Bitcoin for a potential supply crunch.
When the supply of Bitcoin decreases and demand continues to rise, the price typically rises. The limited supply, coupled with growing demand, is driving prices up.
Source: IntoTheBlock
AMBCrypto observed this demand among large holders via the increasing net flow from large holders. It has risen from -7.15k to 2.44k over the past week, indicating increased capital inflows from large holders into BTC.
These increased purchases from institutions could reduce supply, putting upward pressure on prices.
What do the BTC charts say?
While the analysis provided above offers a promising outlook for BTC, it is essential to check other market indicators and determine what they suggest.
Source: CryptoQuant
For starters, Bitcoin’s price-to-earnings ratio has fallen over the past three days, from 0.5 to 0.43. This decline suggests that large holders and institutional investors are accumulating BTC through OTC markets or private transactions, avoiding exchanges.
Such accumulation is a bullish signal, as it reflects growing institutional confidence in Bitcoin’s long-term potential.
Source: IntoTheBlock
Moreover, Bitcoin outflow volume from aggregate exchanges has increased after the initial decline, from 23.2k to 29.66k in the past three days. When outflows from stock markets peak, it reflects accumulation and holding behavior.
Read Bitcoin’s [BTC] Price forecast 2024-25
Simply put, BTC is experiencing significant demand among investors, which continues to increase upward pressure on BTC prices. If these sentiments hold, Bitcoin will regain the resistance at $99,206 in the near term.
However, if sellers reenter the market, as has been evident over the past day, BTC will find support around $95,830.