Recently, the Bitcoin market is rife with undercurrents, and a game concerning the bull market is quietly unfolding in the over-the-counter (OTC) market. According to CryptoQuant data, the Bitcoin balance at OTC counters plummeted from 480,000 in September 2021 to the current 146,000, a drop of as much as 70%. This 'great escape' not only reveals the movements of institutional investors but may also indicate that the Bitcoin price is about to face a massive shock. OTC Counter: The 'behind-the-scenes players' of the Bitcoin market.
Unlike ordinary investors who buy and sell Bitcoin on exchanges, OTC counters are more like private clubs serving 'big players.' Institutional investors can conduct large transactions through OTC to avoid triggering severe price fluctuations in the public market, while also obtaining better liquidity and more favorable prices. Therefore, the Bitcoin balance at OTC counters has always been considered an important indicator of institutional investor participation.
From 480,000 to 146,000: Are institutional investors fleeing?
In the past two years, the Bitcoin balance at OTC counters has continuously declined from 480,000 to 146,000, raising market concerns about institutional investors dumping Bitcoin. Some analysts believe this may signal that institutional investors are losing confidence in the cryptocurrency market and are withdrawing funds from this high-risk area.
The contest for the bull market: To flee or to gather strength?
However, another viewpoint suggests that the decline in OTC counter balance does not necessarily mean institutional investors are fleeing, but rather that they are gearing up for the next bull market. This perspective argues that institutional investors transferring Bitcoin from OTC counters to private wallets or custody institutions is to better control their assets and prepare for larger-scale purchases in the future.
OTC reserves depleted: Bitcoin prices may experience severe fluctuations.
Whether institutional investors are fleeing or gathering strength, the continued decline in OTC counter balance will have a significant impact on Bitcoin prices. Once the Bitcoin reserves at OTC counters are depleted, all purchasing activities will be executed through exchanges, which may lead to increased volatility in Bitcoin prices.
Future outlook: Will the bull market arrive as expected?
Currently, the Bitcoin market is at a critical juncture. The continued decline in OTC counter balance, uncertainty in the macroeconomic environment, and changes in regulatory policies all make Bitcoin's future full of variables. Whether it will continue to drop or start a new round of bull market remains to be seen.
The significant decline in Bitcoin OTC counter balance reveals the important role of institutional investors in this market. Their movements not only affect Bitcoin's price trends but also indicate the future development direction of the cryptocurrency market. In this contest for the bull market, whether to flee or to gather strength, the choices of institutional investors will ultimately determine Bitcoin's fate.