The Bitcoin bulls are back in action with the BTC price surging past $60,700 again. However, on-chain data from CryptoQuant shows that the Bitcoin over-the-counter (OTC) desk balances from miners have seen a sharp surge suggesting caution moving ahead.
Bitcoin OTC Desk Balances Jump By 70%
As per the on-chain data from CryptoQuant, Bitcoin OTC desk balances have surged by 70% in the past three months, shooting up all the way from 215,000 BTC in June to 368,000 BTC in August, marking a staggering increase of 153,000 BTC. This is the highest level of OTC desk balances for Bitcoin in over two years since June 2022.
Bitcoin miners typically use the OTC desks to sell BTC without affecting the spot prices. The OTC desks help to curb the volatility against selling on the exchanges. The significant rise in OTC desk balances suggests heightened selling activity among miners. Historically, such increases have been linked to declines in Bitcoin prices, noted CryptoQuant.
BTC Price Sentiment Shifts from Bearish to Neutral
During the last month of July, the coin was in a strong bearish phase due to the massive influx triggered by Mt. Gox repayment as well as the sell-off from the German government. Moreover, the US government has also been moving its coins recently creating panic in the market. bitcoin analyst Willy Woo stated that this led to rising speculation of the creation of more “paper BTC”.
As a result, Bitcoin faced a significant downside in early August by wiping out the massive open interest in the market leading to a reset. Woo called this reset of speculative “paper bets” a healthy sign as it clears the speculative froth and allows Bitcoin to resume the upward journey again.
As a result, Woo believes that the market has finally transitioned from staying bearish to becoming neutral. However, he expects Bitcoin to continue being in the consolidation phase adding that “BTC price action needs to get really boring” to kickstart a rally. “I feel like we are 66% the way there. Much of the speculation has left, we still need more of the spot BTC to be absorbed,” said Woo.
Woo stated that the good news is that we aren’t in a bear market yet but just in the consolidation phase.
