Bitcoin Approaches All-Time Highs as Daily OTC Desk Inflows Drop to Year's Lows: CryptoQuant

Over-the-counter desks hold 416,000 bitcoin valued around $30 billion, a level that has remained stagnant for the past month.

Bitcoin (BTC) price is approaching record highs again, but a key metric suggests that large over-the-counter (OTC) trades are slowing down, which could be helping the cryptocurrency to trade within a narrow range.

According to data from on-chain analytics platform CryptoQuant, OTC desks currently hold 416,000 BTC, which is valued at around $30 billion at current prices. This level has remained relatively stagnant over the past month.

In comparison, during the first quarter of 2022, OTC desks held an average of less than 200,000 BTC, which suggests that a large amount of bitcoin has been accumulating off exchanges this year.

Institutions and high-net-worth individuals often prefer to trade OTC to avoid having their transactions appear on crypto exchange order books, which enables them to transact large volumes of bitcoin without affecting the market price.

no surprise that the bitcoin price has been largely trending within a sideways channel over the past seven months.

With so much bitcoin on OTC desks, U.S. spot-listed exchange-traded funds (ETFs) could make purchases without having a material impact on the spot price.

For example, even Tuesday’s record daily purchases by the bitcoin ETFs represent just 2% of the total bitcoin balance on OTC desks.

During the first quarter, with bitcoin posting a new all-time high shortly after the ETFs received regulatory approval, the ETFs' share of the total bitcoin inventory ranged between 9% and 12%.

However, the total OTC desk balance has held pretty steady since the beginning of September. The 30-day change is just 3,000 BTC, down from a June high of 92,000 BTC.

During the first quarter, pent-up demand led to a negative 30-day change in OTC desk balances, which helped propel the asset to its record high.

For bitcoin to go higher this cycle, daily inflows into OTC desks need to start reducing, as is observed currently. Daily inflows into OTC desks have declined to the lowest levels this year.

According to CryptoQuant, in October, OTC desks averaged around 90,000 bitcoin, a reduction of 52% compared with the first three quarters of the year.

If demand for BTC continues accelerating amid low inflows into OTC desks, this could propel bitcoin to new highs.

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