This week has been a whirlwind for Bitcoin enthusiasts as the leading cryptocurrency experienced a dramatic rise to a new all-time high, followed by a sharp decline of approximately 13% just days later. On Friday, December 20, Bitcoin’s price dipped to an unexpected low of $92,000. This sudden drop occurred shortly after the US Federal Reserve announced a rate cut, which sent ripples across various financial markets, causing widespread downturns. Despite this setback, Bitcoin is showing signs of recovery and is currently trading around $97,000.
Can Growing Demand Propel Bitcoin Beyond the $100,000 Threshold?
In an intriguing development on December 20, a report from market analytics platform CryptoQuant highlighted a significant on-chain shift in the supply-demand dynamics of Bitcoin. The findings suggest a resurgence of investor interest in the cryptocurrency market. A key metric to watch is the Total OTC Desk Balance, which measures the volume of Bitcoin held in addresses linked to Over-The-Counter (OTC) desks. This indicator offers valuable insights into the availability of Bitcoin for large investors and institutional entities.
Recent data from CryptoQuant reveals that OTC desks are experiencing their most substantial monthly inventory reduction of 2024, with a decrease of over 26,000 BTC in December alone. This trend has been even more pronounced over the past 30 days, with a total decline of 40,000 BTC since November 20. The diminishing Total OTC Desk Balance is a bullish sign, pointing to the surging demand for Bitcoin and a simultaneous contraction of its supply. Typically, a reduced supply in the open market can pave the way for substantial price increases.
According to CryptoQuant, Bitcoin’s price surged from $40,000 to approximately $74,000 in the first quarter of 2024, driven by demand growth that led to a drop in OTC desks’ inventories. Current market intelligence suggests that the OTC desk inventory is approaching the levels witnessed during the first-quarter rally. Further data from CryptoQuant indicates that Bitcoin’s demand is growing at a monthly rate of 228,000 BTC since entering an expansion phase in late September. Concurrently, accumulation addresses are increasing at a record-high rate of 495,000 BTC per month.
Bitcoin Price Overview
At the time of writing, Bitcoin’s price is approximately $97,655, representing a slight 0.1% decline over the past 24 hours. On a weekly scale, the premier cryptocurrency has decreased by nearly 4%, according to information from CoinGecko. As Bitcoin continues to navigate market fluctuations, investors and analysts alike are keeping a close eye on its performance, anticipating potential opportunities for growth and investment.
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