Bitcoin Defies Gravity at $110K—Will OTC Liquidity Crunch Trigger the Next Leg Up?

Bitcoin’s holding pattern above $110,000 has traders split—bulls see a coiled spring, while bears whisper ’over-the-counter dump incoming.’

The real question: Does shrinking OTC supply signal institutional FOMO or just another whale playing hide-and-seek with their keys? (Spoiler: Wall Street still can’t tell the difference.)

One thing’s certain: When the ’smart money’ finally figures out self-custody, the price discovery will be glorious—or catastrophic, depending on which side of the leverage trade you’re on.

TLDR

• Bitcoin price is trading above $110,000, but short-term pressure remains high.
• Over-the-counter Bitcoin balances have dropped by 371,000 BTC since 2021.
• The total value of the OTC balance decline is approximately $40.8 billion.
• The daily BTC withdrawal rate from OTC sources is around 276 BTC.
• If the current pace continues, OTC balances may run out by July 2026.

Bitcoin price is showing strength in the long term despite facing short-term pressure. While the cryptocurrency trades above $110,000, bearish activity still threatens the current structure. A massive reduction in OTC reserves further supports Bitcoin’s long-term outlook.

The drop in over-the-counter Bitcoin balances highlights a potential long-term supply squeeze. CryptoQuant data shows a reduction of 371,000 BTC in OTC holdings since September 2021. This drop represents a $40.8 billion decline in available Bitcoin outside public exchanges.

Despite this bullish signal, Bitcoin price action reveals short-term uncertainty. Selling pressure continues to dominate after a failed breakout past the $110,400 resistance. The price has since corrected to around $108,609 following the early rally.

Bitcoin Price Wavers as OTC Supply Drops

Since 2021, Over-the-counter bitcoin balances have plunged from 486,000 BTC to 115,000 BTC, a 4.2-fold decrease in OTC reserves over nearly three years. With just 115,000 BTC left, the current supply appears limited.

The daily withdrawal rate stands at 276 BTC, which implies full depletion by July 2026 if the trend continues. Such a consistent drawdown in OTC reserves supports long-term bullish expectations for the Bitcoin price. This declining supply signals growing demand and accumulation.

Despite the drawdown, bitcoin price remains volatile in short-term charts. Buyers attempted a push above $110,400, but sellers quickly overwhelmed the market. Consequently, the price failed to hold gains and dropped below $109,000.

Short-Term Bitcoin Price Trend Turns Cautious

Since early May, the Bitcoin price has produced higher highs and higher lows, signaling an ongoing bullish trend. However, recent movements have shown weakness following the all-time high of $111,959. Since then, two lower highs have developed on the one-hour chart.

Traders now focus on the $106,700 support level as a key zone. A break below this area WOULD indicate a short-term bearish regime. Such a move may trigger further declines toward the $102,400 region.

The next support zone extends from $105,800 to $102,400, where strong buyer interest could emerge. The Bitcoin price must hold above $100,000 to maintain the broader bullish structure. Until then, short-term traders are cautious, while long-term investors remain optimistic.

Despite recent weakness, the long-term Bitcoin price trend stays bullish. Key psychological support at $100,000 remains intact and continues to anchor investor sentiment. As long as this level holds, the market outlook stays positive.