Liquidity in the over the counter market for Bitcoin continues to shrink, with OTC balances steadily declining since 2022. New data indicates that these balances have now dropped to their lowest level on record.
OTC Holdings Continue to Decline
According to recent analysis from CryptoQuant, large investors are still accumulating Bitcoin even as available OTC supply keeps falling. In past market cycles, OTC balances usually rise toward the end of a bull run, but this cycle has shown the opposite behavior, with balances continuing to decrease instead of building up.
CryptoQuant reports that OTC Bitcoin holdings have fallen by about 400,000 BTC, dropping from roughly 550,000 BTC down to around 150,000 BTC. This decline has happened alongside ongoing whale accumulation. The firm notes that this cycle differs from previous ones because accumulation has lasted longer and liquidity growth has been weaker during the bull phase.
The analysis suggests that a stronger price rally may only begin once this accumulation phase slows down. Until then, the extremely low OTC balance points to persistent accumulation pressure and tightening liquidity conditions.
Signs of a Deeper Market Reset
Another on chain indicator tracked by CryptoQuant shows that Spent Output Profit Ratio remains below the key level of 1. This means many investors are still spending Bitcoin at a loss rather than selling at a profit.
The 30 day average has also struggled to move back above this threshold, suggesting that demand is still not strong enough to absorb selling pressure. In previous cycles, sustained recoveries have typically started only after this ratio moves above 1 and holds as support.
Long term holders are also realizing much smaller profits compared to earlier market peaks, as shown by the declining Long Term Holder SOPR. If this trend continues, it could signal that the market is moving closer to deeper reset conditions often seen near major bottoms.
Institutional Activity Continues
Despite these weaker signals, Strategy led by Michael Saylor recently purchased 520 BTC worth about 35 million dollars. After this latest acquisition, the company’s total holdings have risen to 847,363 BTC.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
