Bearish signs? Highest BTC level in 2 years on crypto OTC desks could mean trouble for Bitcoin

Crypto over-the-counter (OTC) desks, which facilitate high-volume transactions between buyers and sellers, currently hold 368,000 Bitcoin (BTC), worth a staggering $22 billion according to current market prices, the highest level since June 2022.

A report by on-chain analyst CryptoQuant found that the $22 billion in BTC came from a notable 70% increase in balances over the past three months. Specifically, the number of bitcoins in wallets connected to OTC desks rose from 215,000 BTC (about $13 billion) in June to 368,000 BTC ($22 billion) this month, according to CryptoQuant. This represents an impressive gain of 153,000 BTC ($9.2 billion) during the three-month period.

Miners are the main culprits

The OTC desk acts as an intermediary, allowing direct, high-volume transactions between buyers and sellers without the need for a public order book. These platforms help large investors discreetly place and execute large orders without heavily influencing the market.

Major investors believe that miners are a major contributor to the growing Bitcoin inventory on OTC desks.

CryptoQuant noted that they often resort to OTC trades to sell their BTC “to achieve better execution without affecting the market price, as might be the case on exchanges.”

The analytics platform added that the significant increase in BTC balances on the OTC desk indicates significant selling activity among miners.

A recurring trend

CryptoQuant pointed out a recurring trend associated with rising Bitcoin OTC desk holdings. According to the report, an increase in Bitcoin OTC desk holdings often leads to a decline in the price of the digital asset.

“Historically, an increase in Bitcoin OTC desk balances has been associated with a decline in Bitcoin price,” wrote CryptoQuant.

This should not be surprising, as significant selling by large investors such as mining companies often leads to short-term price weakness.

At the time of writing, BTC was trading at $60,747, up slightly over the past 24 hours.