Peter Smith
Bitcoin (BTC) surged past $70,000 but faces resistance as OTC inflows decrease, impacting price momentum and signaling potential volatility ahead.
Bitcoin (BTC) Breaks $70k, Then Pauses Amid Market Adjustments
Bitcoin (BTC/USD) experienced a notable milestone this week, breaking above $70,000 for the first time since July. The leading cryptocurrency surged by 8% over seven days before consolidating, showing a minor 1% drop at the time of writing. This fluctuation marks BTC’s entry into a potentially pivotal zone, as the market evaluates the impact of reduced over-the-counter (OTC) inflows on price action.
A key driver of BTC’s recent stability has been the shift in OTC activity, where large traders can privately exchange assets. Data from CryptoQuant reveals that OTC desks are now holding around 416,000 BTC, valued at approximately $30 billion. This volume is significantly higher than 200,000 BTC from the year's first quarter. For major investors and institutions, OTC desks provide a way to buy and sell large amounts without publicly impacting market prices. The abundance of Bitcoin in OTC venues has kept BTC’s price relatively stable over recent months.
As OTC activity slows, the potential for BTC price fluctuation increases. Daily BTC inflows into OTC desks in October averaged 90,000 BTC, marking a 52% drop compared to the first three quarters of 2024. This shift aligns with BTC’s latest break past the $70,000 threshold, suggesting OTC outflows may reduce selling pressure on exchanges, leaving BTC price momentum to investor sentiment and market demand.
Technical Analysis: BTC/USD Seeks Support After Brief Pullback
Bitcoin (BTC/USD) is currently consolidating around the $72,000 mark, navigating through key technical levels. The daily candlestick suggests a potential bearish inside bar formation, although bullish momentum remains in play. A retest of the recent trendline breakout or a potential revisit of the $70,000 support level could set the stage for BTC’s next move.
The confluence zone between $70,000 and $68,334 is crucial for BTC to maintain its upward trajectory. If BTC manages to rebound, this area may serve as a foundation for further gains, with any strong bounce potentially signaling a continuation of the bullish run.
BTC faces immediate resistance at $73,777, with the all-time high of $75,000 remaining a significant target. Conversely, support is found at $70,000 and $68,334, with the further backing established around $65,876. Monitoring these levels will be essential as BTC seeks direction amidst fluctuating OTC inflows and evolving market sentiment.
Conclusion
With OTC inflows diminishing, BTC’s price momentum may increasingly rely on exchange-traded demand, especially as U.S.-listed spot ETFs gain traction. Reduced OTC availability could lead to increased spot price volatility, a factor BTC investors will watch closely as the market tests new highs.
Peter Smith
