The decline in Bitcoin inventories in OTC markets indicates tightening supply and upward price pressure. However, recent Bitcoin price volatility also shows changing market sentiment.
Decline in Bitcoin Inventories in OTC Markets
In recent months, Bitcoin inventories in over-the-counter (OTC) markets have seen a significant decline. Since November 2024, the total OTC Bitcoin balance has dropped by 40,000 BTC, signalling tightening supply. The largest monthly inventory decline of 26,000 BTC was observed in 2024, correlating with increased demand for cryptocurrency.
Bitcoin Market: Impact of Inventory Decline
The reduction in inventories in OTC markets has directly correlated with the increase in Bitcoin price, which rose from $40,000 to $74,000 earlier this year. As inventory levels continued to tighten, the reduction in supply created upward price pressure.
Short-term Volatility and Market Outlook
Despite the earlier surge, Bitcoin’s price has recently declined, dropping from $98,420 to $96,520 in the last 24 hours, a decrease of 1.93%. This dip is accompanied by a decrease in Bitcoin’s market cap, which has fallen by 1.97% to $1.91 trillion. These recent developments suggest potential caution in the market as Bitcoin experiences short-term volatility following earlier price spikes.
Despite the market cap falling below $2 trillion, tracking inventory and price changes remains crucial for understanding market direction.
