What is OTC trading? and why is it important? It is Bitcoin trading outside of centralized exchanges, typically used by large investors (market whales) or institutions.
A high OTC balance means that more Bitcoin is being transferred to OTC wallets, usually in preparation for selling. Considering previous periods when OTC balances rose, the price of Bitcoin fell. This occurred between 2018 and 2021, indicating a sell-off that was accompanied by a decline in the price of Bitcoin.
On the other hand, a low OTC balance indicates the withdrawal of Bitcoin from these wallets, often to cold storage, indicating an intention to hold it.
During periods of low OTC, this indicates an exit of Bitcoin from OTC exchanges. This can be interpreted as a bullish signal because large entities may not intend to sell soon. As the indicator shows, over the past few days, there has been a significant decline in OTC balances, indicating the exit of Bitcoin from OTC exchanges to cold storage (wallets). This indicates that these individuals are waiting for further increases in Bitcoin prices and have no intention of selling at this time.
Written by Arab Chain
