Here’s how the over-the-counter availability of Bitcoin can affect the price of BTC (CryptoQuant)

Bitcoin (BTC) is experiencing positive momentum that has pushed it very close to its all-time high of $73,750. The top crypto asset reached a couple of hundred dollars to surpass this milestone on October 29th. However, it recorded a small correction and is currently trading at $72,200.

While crypto enthusiasts are anticipating a new high in the coming days, CryptoQuant analysts have explained the role that over-the-counter (OTC) bitcoin availability could play in the asset’s price trajectory in the near term.

Bitcoin Rallies on Demand for ETFs

According to the CryptoQuant report, bitcoin’s recovery is being driven by increasing net purchases of U.S. exchange-traded funds (ETFs).

These purchases have increased from a daily volume of 1,300 BTC at the beginning of the month to 5,800 BTC on October 29. ETFs recorded their largest daily purchase of 7,700 BTC for the month on October 13.

Despite the increased demand for ETFs, daily buying volumes have yet to rise to the levels seen in February and March, when investors bought a maximum of 16,000 BTC. CryptoQuant said these lower daily buys could address investor concerns that BTC will not hit a new high amid growing demand for ETFs.

The balance of the OTC tables will remain negative

In the first quarter of 2024, BTC surged to all-time highs as the asset’s balance growth on OTC tables remained in negative territory. The opposite is the case now; There are more bitcoins available on OTC counters than at the beginning of the year. Compared to a balance of 183,000-193,000 BTC in the first quarter of 2024, there are currently around 416,000 BTC on the OTC tables at the time of writing.

Due to the high availability of BTC on OTC tables, daily ETF purchases represent a lower portion of Bitcoin inventory. Total daily ETF purchases currently represent 1% to 2% of the total BTC balance on OTC tables, compared to a 9% to 12% share recorded in the first quarter of the year. Analysts say it will take greater demand for ETFs to reduce Bitcoin inventory on OTC tables.

On the other hand, BTC balances on OTC tables have stopped growing at the rate seen in Q2 and Q3 due to the decline in inflows. The monthly growth of the total BTC balance on these desks is 3,000 BTC, compared to 77,000 BTC and 92,000 BTC in August and June.

Since BTC rallies when OTC table balances go negative, demand for ETFs should increase as these tables continue to see lower entries for the crypto asset to record new highs.

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