Bitcoin saw a setback after the holidays, losing almost 4% in value over the past day. This latest dip briefly dragged its price under $95.2k on Thursday. In fact, following multiple corrections since mid-December, Bitcoin has nearly wiped out its monthly gain.

However, data suggests there could be room for more upward movement.

Declining Binance Reserves

CryptoQuant’s latest analysis reveals that Binance’s Bitcoin reserves have dropped to their lowest levels since the beginning of 2024. This decline notably began in August and mirrors a similar trend observed in January, when reserves also hit a low, a moment that preceded a 90% rally in BTC’s price.

This milestone coincides with Bitcoin reaching an all-time high of around $108,000. The diminishing reserves on Binance indicate that investors are growing increasingly confident in Bitcoin’s long-term potential, choosing to withdraw their holdings rather than keeping them on the exchange for short-term selling.

Historically, such periods of withdrawal have often been associated with the buildup of positive market momentum.

Meanwhile, CryptoQuant data also revealed a surge in Bitcoin demand, as over-the-counter (OTC) desks reported their largest monthly inventory decline of 2024, with a reduction of 26,000 BTC. Since November 20, the total balance held by these desks has dropped by 40,000 BTC, which is evidence of a tightening of supply.

This decline in available inventory suggests that demand is increasing, thereby contributing to a building market momentum. The ongoing withdrawal of Bitcoin from OTC desks indicates growing confidence in the asset, which, in turn, could potentially set the stage for the next leg up as the supply becomes more constrained.

Bitcoin: $120k A Realistic Target for Jan

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