Bitcoin OTC Desks Hit Crisis Levels as Supply Shortage Sparks Market Panic

Whales are circling as liquidity dries up—OTC desks can't source enough BTC to meet institutional demand. The invisible hand of the market is waving a red flag.

When the 'easy money' stops flowing

Private trading channels meant for million-dollar orders are running on fumes. No fancy charts needed—when OTC desks can't fill orders, smart money starts asking uncomfortable questions.

The institutional FOMO accelerator

Hedge funds and family offices are now competing for scraps like retail traders during a bull run. Turns out Wall Street's 'sophisticated infrastructure' still depends on the same scarce asset we've all been stacking.

As spreads widen and premiums spike, one thing's clear: the suits finally understand what 'number go up' really means—especially when they're on the wrong side of the trade. Maybe they should've listened when we said 'not your keys, not your coins'—but what do plebs know about 'proper risk management'?

In brief

• The bitcoin market is going through a quiet phase, but a structural imbalance is looming.
• OTC desks, main suppliers to institutions, are experiencing a critical drop in their reserves.
• Glassnode observes a continuous decline in BTC reserves on exchanges, increasing pressure on total supply.
• The market oscillates between supply shortage and investor caution, hinting at an imminent tipping point.

OTC desks running low

Warning signs intensify in over-the-counter (OTC) markets, where financial institutions traditionally acquire their bitcoins without disturbing market prices, while the leading crypto is losing momentum.

Trader Bedlam Capital Pres revealed a critical situation. “MSTR buys most of its bitcoins through over-the-counter (OTC) platforms. Since the beginning of the year, the company has acquired 182,391 BTC“, he states, referring to Strategy’s accumulation strategy.

$MSTR buys most of its BTC from OTC trade desks.

MSTR bought 182,391 BTC YTD.

OTC trade desks' collective balances are down to around 155,000 BTC.

As the OTC desks run low, the demand on the public exchanges will increase, and that is what will uncork BTC's price. pic.twitter.com/MYkOMcCp3u

This figure is all the more significant as OTC desk balances now only hold around 155,000 BTC. A historically low threshold, putting the market facing an imbalance between available supply and growing institutional demand.

In this context, Bedlam Capital Pres estimates that pressure will inevitably shift to public exchange platforms, amplifying the risk of a supply shock : “as OTC platforms dry up, demand will shift to public exchanges, and that is what will uncork the price of the flagship crypto “.

This scenario fits into a general scarcity trend. According to Glassnode, combined BTC reserves on exchanges have fallen to 2.919 million. In summary, the market faces several converging factors :

• A continuous decline in OTC reserves, below Strategy’s annual demand alone ;

• A significant reduction in reserves on exchanges, signaling a withdrawal of BTC available for sale ;

• Persistent institutional demand, led by companies like Strategy, which buys BTC almost every week regardless of price.

This setup strengthens the hypothesis of an imminent supply-demand imbalance, a situation conducive to a rapid price rise if demand continues to pour in.

Mass profit-taking: a short-term braking dynamic

Alongside this supply shortage on OTC markets and exchanges, the market experiences a very different movement: a wave of large-scale profit-taking, notably by long-term holders.

According to Glassnode, profits realized in just one day on Wednesday exceeded $1 billion. The details are revealing : “$362 million, about 35.8%, comes from ancient bitcoins held for 7 to 10 years – a rare event that could reflect either internal transfers or true market exits “, specifies the firm on X.

Over the past 24h, #Bitcoin holders realized over $1B in profit. $362M (≈35.8%) came from ancient coins held for 7–10 years – a rare event that may reflect internal transfers or true exits. Another $93M came from 1–2 year holders, also marking notable profit realization. pic.twitter.com/vBZIRarTcM

Another significant volume, $93 million, comes from holders who retained their bitcoins between 1 and 2 years. These figures indicate an outflow of liquidity from historically stable profiles.

This ambiguous context strengthens the uncertainty about the market’s future developments. On one side, a potential supply scarcity, and on the other, a selling dynamic that could restrain any immediate bullish push.

Despite structural signals favorable to a bullish recovery, the market remains tense, weakened by a still cautious or even opportunistic investor psychology. If the supply shock materializes, it could face demand less dynamic than expected, notably due to some investors’ reluctance to accumulate further in an uncertain environment. Conversely, if demand picks up, the lack of supply could amplify the rise, which could lead bitcoin toward $148,000.

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