Following a dip to a two-week low of $92,118 recently, Bitcoin (BTC) has exhibited resilience and staged a notable recovery.
After bouncing back from the market downturn to reach a peak of $98,125, BTC has seen a minor retracement. As of the current moment, Bitcoin is trading at $98,086, marking a 1.25% gain over the last day.
The strength in the market is mainly attributed to the escalating demand for BTC, particularly from institutional entities, as per the analysis by Cryptoquant.
Increasing Institutional Appetite for Bitcoin
Cryptoquant’s findings reveal a surge in Bitcoin demand. They report that OTC desks are witnessing their most substantial monthly inventory depletion in 2024, with a reduction of 26,000 BTC tokens for the current month alone.
Since November 20, 2024, Bitcoin’s available supply has diminished by 40,000 BTC, indicating a continuous tightening of the supply.
The notable decrease in supply underscores the heightened institutional interest in Bitcoin. The existing market conditions set Bitcoin up for a potential supply crunch.
Historically, a decrease in Bitcoin’s supply amid rising demand typically propels the price upwards. The combination of limited supply and escalating demand acts as a catalyst for price increments.
CryptoCrypto has pinpointed this surge in demand among major holders through the growing netflow of large holders. This metric has surged from -7,150 to 2,440 in the past week, indicating an increase in capital inflow from significant holders into BTC.
The escalated acquisitions by institutions might lead to a decrease in supply, triggering upward pressure on prices.
Insights from BTC’s Charts
While the aforementioned analysis paints a favorable picture for BTC, it is crucial to cross-reference with other market indicators to interpret their signals.
Notably, Bitcoin’s exchange whale ratio has fallen over the past three days, dropping from 0.5 to 0.43. This decline implies that significant holders and institutional investors are amassing BTC via OTC markets or private transactions, bypassing exchanges.
Such accumulation serves as a bullish sign, reflecting the increasing institutional trust in Bitcoin’s long-term prospects.
Moreover, the outflow volume of Bitcoin from aggregated exchanges has risen post the initial decline, climbing from 23,200 to 29,660 over the past three days. A surge in outflow from exchanges indicates accumulation and holding tendencies.
In essence, BTC is witnessing substantial demand from investors, which is constantly pushing BTC prices upwards. If this bullish sentiment prevails, Bitcoin is poised to surpass the $99,206 resistance level in the near term.
However, in case sellers rejoin the market, as witnessed recently, BTC is likely to find support around $95,830.