Bitcoin Miners Have Been Depositing Big To OTC Desks Recently

On-chain data shows the OTC desks that Bitcoin miners like to use have seen their balance shoot up, a sign that historically been bearish.

On-chain data shows the OTC desks that Bitcoin miners like to use have seen their balance shoot up, a sign that has historically been bearish.

Bitcoin Miners Have Been Depositing Big To OTC Desks Recently

As highlighted by an analyst in a CryptoQuant Quicktake post, BTC miners have been observed to be depositing to over-the-counter (OTC) desks over the past three months.

OTC desks are platforms that serve to directly match buyers and sellers for trades. Since the selling and buying that takes place on these desks is more discreet than it is on centralized exchanges, it can be hard to tell who exactly is trading on them.

On-chain data, however, has been used by analytics firm CryptoQuant to identify certain addresses that are likely to be associated with OTC desks that miners show a preference for.

These are the wallets that miners are observed to be transferring to the most, and considering that miners are generally moving coins out of their reserve for selling, it would make sense for the addresses that they send to to be connected to the sales somehow.

The below chart shows how the balance of these probable miner “OTC desks” has trended over the past decade.

As you can see in the chart, the miner OTC desk balance was at relatively low values earlier in the year, even after the cryptocurrency had rallied to its new all-time high (ATH).

However, in the consolidation period that has followed since this ATH, miners have been observed to be making large transfers into these addresses. As the quant notes,

“Bitcoin OTC desk balances for miners increased by more than 70% over the past three months, rising from 215,000 BTC in June to 368,000 BTC in August — an increase of 153,000 BTC.”

The metric hasn’t been at such a high level since way back in June 2022. In light of these large deposits, it would seem like miners have indeed been eager to sell their coins recently.

The quant has highlighted in the chart what happened in previous periods where the miner OTC desk balance observed a similar trajectory. As the chart shows, such a pattern has historically led to a decline for the BTC price.

As for why miners have shifted such a large amount of coins to these platforms, the answer may be another event that occurred in April of this year: the fourth Halving.

Halvings are periodic events taking place approximately every four years that permanently cut the Bitcoin block subsidy in half. Since miners derive the majority of their income from the block subsidy, it’s clear how these events can impact their finances.

Miners did initially hold off on transferring to these platforms after this event, but that may be because the market atmosphere was still bullish at the time. As the consolidation dragged on, though, the miners may not have been able to cope with the pressure anymore, ultimately deciding to sell.

Given what has occurred historically when this pattern has emerged, it’s possible that BTC may end up feeling a similar bearish effect this time as well.

BTC Price

At the time of writing, Bitcoin is valued at around $61,300, showing an increase of more than 4% over the last seven days.

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