This week was one of two distinct halves of the price of bitcoin, with the leading cryptocurrency hitting a new all-time high and dropping roughly 13% a few days later. On Friday, December 20, the price of btc fell to $92,000.
This steep drop in bitcoin price came after the US Federal Reserve's rate cut, which also pushed other financial markets into the red. However, it is worth mentioning that the leading cryptocurrency is starting to show signs of recovery, currently hovering around $97,000.
Can rising demand push btc price back above $100,000?
In a recent report on December 20, market analysis platform CryptoQuant <a target="_blank" href="https://x.com/cryptoquant_com/status/1870231570595909927″ target=”_blank”>revealed an interesting on-chain development with bitcoin supply and demand dynamics. According to the blockchain company, the btc market appears to be enjoying renewed investor interest.
The relevant indicator here is the total OTC desk balance, which tracks the amount of bitcoin held at addresses associated with over-the-counter (OTC) desks. This metric provides insight into the supply of btc to large investors and institutional players.
According to data from CryptoQuant, OTC desks are seeing their largest monthly inventory drop of 2024, with over 26,000 btc dropping so far in December. This decline has been even more significant over the last 30 days, with the balance dropping by 40,000 btc since November 20.
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This decrease in the total OTC desk balance is a bullish indicator, reflecting the growing demand for bitcoin and the simultaneous reduction in supply. Typically, contracting btc supply on the open market could set the stage for a period of significant price appreciation.
CryptoQuant noted that the price of bitcoin rose from $40,000 to around $74,000 in the first quarter of 2024 after growth in demand caused over-the-counter inventories to drop. According to market information, OTC desk inventory is beginning to approach levels seen during the first quarter rally.
Data from CryptoQuant shows that apparent demand for bitcoin is currently growing at a monthly pace of 228,000 btc after entering expansion territory in late September. At the same time, the accumulation address balance is increasing at a record pace of 495,000 btc per month.
bitcoin price at a glance
At the time of writing, the price of bitcoin stands at around $97,655, reflecting a 0.1% drop in the last 24 hours. The leading cryptocurrency is down almost 4% in the weekly period, according to data from CoinGecko.
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Featured image created by DALL-E, TradingView chart
