TL;DR
- Bitcoin reserves held in over-the-counter desks have declined by nearly 400,000 BTC since 2022, according to recent CryptoQuant data.
- The drop reflects continued accumulation by whales and institutional investors while available liquidity keeps tightening.
- Analysts also point out that long-term holders are selling fewer coins than in previous cycles, a signal that many investors still expect higher prices despite short-term market weakness and slower recovery indicators.
Bitcoin’s over-the-counter market is showing signs of a growing supply squeeze as OTC reserves continue to shrink across the current cycle. New data from CryptoQuant indicates that Bitcoin supply available through private trading desks has fallen sharply since 2022, even while institutional demand remains active.
The report estimates that OTC balances declined from around 550,000 BTC to nearly 150,000 BTC over the past few years. This reduction comes at a time when large holders continue accumulating Bitcoin rather than distributing positions into the market.
Bitcoin Supply Crunch Gains Attention
OTC desks often serve institutional buyers that want to acquire large amounts of Bitcoin without affecting spot market prices. During previous bull cycles, balances on these desks usually expanded as holders prepared to sell into market strength. This time, the trend looks notably different.
CryptoQuant analysts noted that whale accumulation has continued for a longer period than in earlier cycles. At the same time, the pace of OTC reserve replenishment remains weak. That combination suggests available Bitcoin liquidity is becoming increasingly limited.
Several public companies also continue adding Bitcoin to their balance sheets. Strategy, led by Michael Saylor, recently disclosed another purchase of 520 BTC worth nearly $35 million. The company now holds more than 847,000 BTC, reinforcing the broader institutional accumulation trend.
Spot Bitcoin ETFs in the United States have also absorbed significant amounts of BTC since their launch in early 2024, reducing circulating supply available on exchanges and OTC platforms.
On-Chain Metrics Show Mixed Signals
Despite tightening supply conditions, some on-chain indicators still reflect cautious market behavior. CryptoQuant’s adjusted Spent Output Profit Ratio, known as aSOPR, remains below the critical level of one. This suggests many investors are still moving coins at a loss instead of securing profits.
Historically, Bitcoin recoveries tend to strengthen once the indicator reclaims that threshold and maintains upward momentum. Long-term holder profit-taking has also slowed compared with previous market peaks, pointing to lower selling pressure across the broader market.
If OTC balances continue falling while institutional demand remains steady, analysts believe Bitcoin could face stronger scarcity conditions in the coming months.
