As Bitcoin (BTC) continues to tease a latest all-time high (ATH), day by day over-the-counter (OTC) desk inflows have plummeted to yearly lows. 

Bitcoin’s “Uptober” Narrative Stays Intact

Bitcoin has overturned the sluggish begin to its historically most bullish month, recording greater than 13% gains in October and coming close by of a latest ATH. 

The leading digital asset’s performance has restored faith within the “Uptober” narrative because it looks to record its biggest one-month gains since March 2024, when it achieved its current ATH of $73,737.

Data from crypto analytics firm CryptoQuant indicates that BTC balance with OTC desks has swelled to 416,000 – value roughly $30 billion. Compared, OTC desks averaged lower than 200,000 BTC during Q1 2024.

For the uninitiated, OTC desks are typically utilized by sophisticated and seasoned investors to trade the underlying asset without impacting its spot market price. OTC trades also enable institutional investors to make trades without showing their transactions on an exchange’s trading books.

The high amount of BTC held by OTC desks allows US-based spot exchange-traded funds (ETF) to purchase BTC without affecting its spot price.

How Do OTC Desk Inflows Impact Bitcoin Price?

In response to data from SoSoValue, spot BTC ETFs attracted a day by day total net inflow of greater than $870 million on October 29. Nevertheless, this figure only represents about 2% of the full BTC currently held by OTC desks. 

Compared, during Q1 2024 – when BTC made its ATH following the ETF approval – the quantity of BTC purchased by spot ETFs as a proportion of OTC-held BTC reserves ranged between 9% and 12%. 

Because the starting of September, the full OTC desk balance has been stable. The 30-day change – a metric that tracks the web change in the quantity of BTC held over the past 30 days – stood at 3,000 BTC in September versus 92,000 BTC in June.

The 30-day change was in negative territory during Q1 2024, indicating strong demand for accumulation from large buyers as more BTC was withdrawn from OTC desks than deposited.

Conversely, a positive 30-day change means more BTC was deposited than withdrawn, potentially signaling reduced buying interest and even selling activity. 

As mentioned earlier, day by day OTC desk inflows have fallen from their June highs, reaching their lowest level in 2024. An additional decline in day by day OTC desk inflows could propel BTC to latest highs. 

Data from CryptoQuant shows that OTC desks averaged near 90,000 BTC in October, a steep decline of greater than 52% in comparison with Q1, Q2, and Q3 2024. 

Recently, Markus Thielen, head of research at 10X Research, remarked that there are “exceptionally high” possibilities of a crypto rally in Q4 2024.

The mix of a powerful demand for BTC, coupled with limited OTC supply, holds the potential to push the crypto-asset to a latest ATH. BTC trades at $72,002 at press time, down 0.7% prior to now 24 hours.

Featured Image from Unsplash.com, Chart from TradingView.com