Bitcoin News Today: Bitcoin OTC Reserves Plunge 70% Despite Price Surge

Generated by AI AgentCoin World
Monday, Jul 21, 2025 10:37 am ET1min read
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Aime RobotAime Summary

- Bitcoin OTC reserves fell 70% to 146,000 BTC despite prices exceeding $100,000, signaling sustained demand.

- CryptoQuant analysts warn shrinking OTC liquidity may force institutional buyers to public exchanges, risking volatility via slippage and thin order books.

- U.S. exchanges hold ~1 million BTC in sell-side inventory, while miners off-exchange hold 117,000 BTC, both posing supply-tightening risks if liquidated.

- Miner capitulation signals and dwindling OTC supply suggest potential long-term accumulation, possibly setting up a bullish breakout when demand shifts to public markets.

Bitcoin reserves held on over-the-counter (OTC) desks have experienced a significant decline, dropping from approximately 480,000 BTC in September 2021 to around 146,000 BTC currently. This reduction in OTC reserves has persisted even after Bitcoin's price surpassed the $100,000 mark, indicating a robust and consistent demand for the cryptocurrency.

Analysts from CryptoQuant, through the insights of analyst Darkfost, have suggested that this trend could be a warning sign. As liquidity in the OTC market diminishes, institutional buyers may increasingly turn to public exchanges. This shift could introduce volatility due to slippage and thinner order books on these exchanges.

Currently, U.S. exchanges collectively hold nearly 1 million BTC in sell-side inventory. This substantial pool of

Bitcoin
could face further depletion if the OTC market continues to contract. Additionally, miners hold about 117,000 BTC off-exchange. If these reserves are liquidated, it would exacerbate the supply tightness.

On-chain metrics, such as Hash Ribbons, have indicated signs of miner capitulation, suggesting that miners may also be inclined to sell their holdings. This potential liquidation by miners could further tighten the supply of Bitcoin.

On the other hand, the dwindling supply of Bitcoin in the OTC market might signal growing long-term accumulation. This accumulation could set the stage for a bullish breakout once demand shifts from the OTC market to public exchanges.