Bitcoin Demand Surge and OTC Desk Inventory Decline Signal Tightening Supply

• OTC Bitcoin inventory decline signals tightening supply and price pressure.  
• Bitcoin’s recent price dip reflects short-term market volatility.  
• Bitcoin’s market cap under $2 trillion may shift market dominance.

Bitcoin has experienced fluctuations in recent months, with the latest data revealing that demand for the cryptocurrency is surging. Over-the-counter (OTC) desks, key players in facilitating large-scale trades, have seen their inventories decline sharply. 

As of recent reports, the total OTC Bitcoin balance has dropped by 40,000 BTC since November 20, 2024, signalling a tightening of supply. 

One of the most trends observed is the sharp reduction in Bitcoin inventories held by OTC desks. As Bitcoin demand surged, these desks experienced their largest monthly inventory decline of 26,000 BTC in 2024. 

This inventory reduction has directly correlated with Bitcoin’s price rise, which spiked from $40,000 to $74,000 earlier in the year. As highlighted in the chart tracking this trend, the pink shaded area indicates the decreasing inventory, which mirrors the upward pressure on prices.

The blue line in the chart represents the total balance of OTC Bitcoin, which has declined throughout this period. As inventory levels tightened, the reduction in supply created upward price pressure. 

This dynamic is a key factor behind the surge in Bitcoin’s value earlier in 2024. However, the inventory decline has shown signs of plateauing, with the balance now at -26,000 BTC.

This could signal a shift in the demand dynamics within the market, as institutional players or large investors may have adjusted their buying strategies.

Despite the earlier surge, Bitcoin’s price has recently declined. Over the past 24 hours, Bitcoin’s price dropped from $98,420 to $96,520, reflecting a 1.93% decrease.

The price dip is accompanied by a reduction in Bitcoin’s market capitalization, which has fallen by 1.97% to $1.91 trillion. Additionally, trading volume has decreased by 48.05% to $50.13 billion.

These recent developments suggest potential caution in the market, as Bitcoin experiences short-term volatility following the earlier price spikes. The steady circulating supply of Bitcoin remains at 19.79 million BTC, with the total supply capped at 21 million BTC. 

However, with Bitcoin’s market cap now under $2 trillion, its dominance in the cryptocurrency market may face shifts if the downward momentum continues.