- BTC has recently hit another ATH.
- There has been more scramble to get BTC, driving up its demand.
Bitcoin has surged to a new all-time high of $106,000, driven by an unprecedented surge in institutional demand and a tightening supply across OTC desks.
On-chain data reveals a significant decline in OTC desk balances, while apparent demand has continued to outpace supply over the last month. This combination has created a supply squeeze that has fueled Bitcoin’s sharp price momentum.
Bitcoin institutional accumulation grows
Analysis of the Bitcoin OTC Desk Balance chart, per CryptoQuant, reveals a sharp decline in OTC balances, marking the steepest drop this year. In the past 30 days alone, OTC desk balances have fallen by 25,000 BTC, while a total of 40,000 BTC has left these desks since November 20.
Source: CryptoQuant
Institutional investors and high-net-worth individuals typically use OTC desks to purchase large amounts of Bitcoin without impacting spot market prices. This depletion signals that institutions are aggressively accumulating, reducing the available supply for broader market participants.
The dwindling OTC reserves coincide with Bitcoin’s rally to new highs, illustrating how institutional demand has fueled upward momentum while creating a supply shortage in the market.
Demand outpaces supply, fueling price momentum
Analysis of the Bitcoin Apparent Demand chart reinforces the narrative of increasing demand. Apparent demand, which tracks net Bitcoin absorption, has surged since November, showing consistent growth as the market rally gained momentum.
Positive apparent demand has dominated, reflecting a market environment where BTC inflows significantly outpace outflows.
Source: CryptoQuant
As demand surged, Bitcoin broke through critical resistance levels, reaching its current high of $106,000.
The decline in OTC balances, combined with this rise in demand, triggered a supply squeeze, creating the perfect environment for BTC’s record-breaking performance.
Bitcoin price action confirms strong bullish sentiment
The price chart confirms Bitcoin’s bullish momentum. The price has formed a clear uptrend, characterized by higher highs and higher lows, indicating market strength. Bitcoin remains comfortably above its 50-day and 200-day moving averages, signaling ongoing support for the rally.
Source: TradingView
Additionally, trading volumes have increased during key upward movements, indicating that price gains are supported by strong participation from both institutional and retail investors.
The Relative Strength Index (RSI) is currently near 70, reflecting strong momentum. However, it also suggests the possibility of short-term consolidation as the market absorbs recent gains.
Institutional demand and supply squeeze drive BTC higher
Bitcoin’s surge to $106,000 directly results from increasing institutional demand and tightening supply. The depletion of OTC desk balances highlights aggressive accumulation by large investors, while apparent demand continues to exceed available supply.
These factors have created the conditions for a significant supply squeeze, pushing Bitcoin to new all-time highs.
– Read Bitcoin (BTC) Price Prediction 2024-25
While short-term consolidation may occur, the long-term outlook remains firmly bullish as institutional confidence and demand for Bitcoin show no signs of slowing.
