Can Growing Demand Push BTC Price Back Above $100,000?

In a recent December 20 report, market analytics platform CryptoQuant revealed an interesting on-chain development with the Bitcoin supply-demand dynamics.

Bitcoin price dropped sharply on Friday, coming close to breaking below the psychological support at $90,000. However, the world’s largest cryptocurrency appears to be recovering from the lows, currently trading at about $97,000.

After rising to a new all-time high during the first half of the week, BTC price dropped by about 13% a few days later. This decline came after the US Federal Reserve hiked interest rates by 50 basis points, pushing other financial markets to the red as well.

Now, as Bitcoin price shows signs of recovering, it remains to be seen whether growing demand can push the cryptocurrency back above the key level of $100,000.

Bitcoin supply-demand dynamics show growing demand

In a recent report on December 20, market analytics platform CryptoQuant highlighted an interesting on-chain development with the Bitcoin supply-demand dynamics.

According to the blockchain firm, the BTC market seems to be enjoying renewed investor interest, which could be contributing to the recent price rally.

The relevant indicator here is the Total OTC Desk Balance, which tracks the amount of Bitcoin held in addresses associated with Over-The-Counter (OTC) desks. This metric provides an insight into the supply of BTC readily available to large investors and institutional players.

Now, according to data from CryptoQuant, the OTC desks are seeing their largest monthly inventory decline of 2024, with over 26,000 BTC having been removed from these addresses so far in December. This decline has been even more significant in the past 30 days, with the balance dropping by 40,000 BTC since November 20.

This decline in the Total OTC Desk Balance is a bullish indicator, which could be signaling the soaring demand for Bitcoin and the shrinking supply at the same time. Typically, the contracting BTC supply in the open market could set the stage for a period of significant price appreciation.

CryptoQuant went on to note that the price of Bitcoin rallied from $40,000 to around $74,000 in the first quarter of 2024 after demand growth caused the Over-The-Counter desks’ inventories to fall. According to the market intelligence, the OTC desk’s inventory is now starting to approach the levels seen during the first-quarter rally.

Data from CryptoQuant shows that Bitcoin’s apparent demand is currently growing at a monthly rate of 228,000 BTC after entering the expansion territory in late September. At the same time, the balance of accumulation addresses is swelling at a record-high rate of 495,000 BTC per month.

Bitcoin price at a glance

At the moment, the price of Bitcoin is around $97,655, showing a 0.1% decrease in the past 24 hours. The premier cryptocurrency is down by nearly 4% on the weekly timeframe, according to data from CoinGecko.