This week was one of two different halves for Bitcoin’s price, with the major cryptocurrency surging to a new all-time high and then falling around 13% a few days later. On Friday, December 20, the BTC price fell to a low of $92,000.
This abrupt drop in the price of Bitcoin came after the US Federal Reserve’s interest rate cut, which also pushed other financial markets into the red. However, it is worth mentioning that the major cryptocurrency is starting to show signs of recovery and is currently hovering around $97,000.
Can growing demand push the BTC price above $100,000 again?
In a recent report on December 20, market analysis platform CryptoQuant said revealed an interesting development in the chain with the supply-demand dynamics of Bitcoin. According to the blockchain company, the BTC market appears to be enjoying renewed interest from investors.
The relevant indicator here is the total OTC agency balance, which tracks the amount of Bitcoin held at addresses associated with Over-The-Counter (OTC) agencies. This metric provides easy insight into the supply of BTC to major investors and institutional players.
According to data from CryptoQuant, OTC agencies are witnessing their largest monthly inventory drop of 2024, down by over 26,000 BTC so far in December. This drop has been even greater over the past 30 days, with the balance falling by 40,000 BTC since November 20.
This decline in the total OTC Desk balance is a bullish indicator, reflecting rising demand for Bitcoin and simultaneously shrinking supply. Typically, the shrinking BTC supply on the open market could pave the way for a period of significant price appreciation.
CryptoQuant noted that Bitcoin’s price rose from $40,000 to around $74,000 in the first quarter of 2024 after demand growth caused OTC agency inventories to drop. According to the market information, the OTC desk inventory is starting to approach the levels of 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 expansion territory in late September. At the same time, the balance of accumulation addresses is growing at a record high of 495,000 BTC per month.
Bitcoin price at a glance
At the time of writing, Bitcoin’s price is around $97,655, reflecting a decline of 0.1% in the past 24 hours. According to data from CoinGecko, the major cryptocurrency is down almost 4% on a weekly basis.
Featured image created by DALL-E, chart from TradingView
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