Bitcoin’s price has been on a wild ride lately. It hit a new all-time high, only to plummet by about 13% a few days later, dipping as low as $92,000 on December 20th. This sudden drop followed a US Federal Reserve rate cut that sent other markets tumbling too. However, Bitcoin is showing signs of recovery, currently trading around $97,000.
Is Demand Driving the Price Back Up?
A recent report from CryptoQuant, a market analytics platform, suggests a surge in Bitcoin demand. They looked at the “Total OTC Desk Balance,” which tracks how much Bitcoin is held by large investors and institutions (Over-The-Counter desks).
This December, OTC desks have seen their biggest monthly inventory drop of 2024 – a decrease of over 26,000 BTC. The decline is even more dramatic over the past 30 days, with a 40,000 BTC drop since November 20th.
This shrinking supply is a bullish sign, indicating strong demand. Historically, when OTC desk inventories fall, Bitcoin’s price tends to rise. For example, in the first quarter of 2024, a similar drop in inventory coincided with a price jump from $40,000 to $74,000. Current inventory levels are approaching those seen during that rally.
Furthermore, CryptoQuant data shows monthly Bitcoin demand is growing at a rate of 228,000 BTC, a trend that started in late September. Simultaneously, the number of addresses accumulating Bitcoin is increasing at a record high of 495,000 BTC per month.
Bitcoin’s Current Price
As of this writing, Bitcoin is trading around $97,655, down slightly (0.1%) in the last 24 hours but down almost 4% for the week.
