Bitcoin closes in on $100K thanks to institutional demand – Details

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  • Bitcoin is experiencing an increase in institutional demand.
  • OTC desks see their largest monthly inventory decline for 2024 dropping by 26k BTC.

As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed numerous market cycles and trends. The current surge in institutional demand for Bitcoin is reminiscent of the gold rush days of yore, only this time, it’s digital gold we are talking about.

Over the last 24 hours, I’ve seen Bitcoin dip down to a 2-week low of $92,118, but it’s displayed remarkable resilience but bouncing back significantly since then.

After bouncing back from the market plunge, Bitcoin peaked at an impressive $98,125. Yet, it has shown a minor dip. At this moment, Bitcoin is being traded at $98,086 which represents a 1.25% growth in the last 24 hours.

The robustness of this market is primarily attributed to the heightened interest in Bitcoin, particularly from institutional investors, as suggested by an analysis conducted by Cryptoquant.

Rising institutional demand for Bitcoin 

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Based on their examination, Cryptoquant found that the demand for Bitcoin is significantly increasing. They noted that Over-The-Counter (OTC) desks are witnessing a record monthly drop in Bitcoin inventory for the year 2024. So far this month, this decline amounts to approximately 26,000 Bitcoin tokens.

Starting from November 20, 2024, there’s been a decrease of 40,000 Bitcoins in circulation, indicating that the supply is still becoming more scarce.

A substantial decrease in the availability of Bitcoins suggests that institutions are increasingly buying them, indicating heightened demand. Under the current market circumstances, Bitcoin might experience a supply crunch.

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As the supply of Bitcoin shrinks while its demand persists, the price often tends to climb. The reason for this is the combination of a limited quantity available and an increasing number of people wanting it, which pushes prices higher.

According to AMBCrypto’s analysis, the trend among significant Bitcoin investors shows a noticeable shift. This is indicated by a rise in positive netflow, which has moved from -7,150 to 2,440 over the last week. This suggests that large-scale investors are pouring more capital into Bitcoin.

An increase in institutional buying might lessen the availability, leading to a potential rise in prices due to increased demand.

What do BTC’s charts say

To get a more comprehensive understanding of Bitcoin’s future, it’s crucial to cross-reference the findings from this analysis with other market signals and see what conclusions they lead us to.

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Initially, the proportion of big players trading Bitcoin on exchanges has decreased from 0.5 to 0.43 over the last three days. This decrease indicates that major investors might be buying Bitcoin through Over-the-Counter (OTC) markets or private deals instead of using exchanges.

The buildup indicates a positive outlook since it signifies increasing faith among institutions that Bitcoin has a promising future.

Over the past three days, I’ve noticed an uptick in Bitcoin’s outflow volume from aggregated exchanges, climbing from 23,200 to 29,660. This surge suggests a trend of accumulation and long-term holding, as heightened exchange outflows typically indicate investors moving their Bitcoins off exchanges for safekeeping.

Read Bitcoin’s [BTC] Price Prediction 2024-25

As a researcher, I’m observing a substantial interest in Bitcoin (BTC) from investors, a trend that seems to be escalating and exerting an upward force on BTC prices. If this momentum persists, it’s plausible that Bitcoin could surmount the $99,206 resistance level in the near future.

Should sellers decide to re-enter the market, similar to what we observed yesterday, Bitcoin (BTC) is likely to find solid support around the $95,830 level, from my analysis perspective.

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2024-12-21 15:03