The Bitcoin over-the-counter (OTC) market is experiencing a severe liquidity crunch as available balances have plunged to record lows, according to data from CryptoQuant. Since 2022, OTC holdings have tumbled from around 550,000 BTC to just 150,000 BTC, a decline of approximately 400,000 BTC. This persistent drawdown contrasts with historical patterns, where OTC balances typically rose toward the end of a bull cycle as large investors distributed coins. Instead, whale accumulation has continued unabated, with the current cycle seeing longer accumulation periods and weaker balance growth during rallies.
While OTC balances hit all-time lows, another on-chain indicator points to cautious spending behavior. CryptoQuant's adjusted Spent Output Profit Ratio (aSOPR) remains below 1, signaling that investors are still moving coins at a loss. The 30-day average has failed to reclaim this critical threshold, suggesting that demand has not yet been strong enough to absorb selling pressure. Meanwhile, the Long-Term Holder SOPR has declined, indicating that long-term investors are taking significantly smaller profits than in previous market peaks. If this trend persists, Bitcoin could be moving toward a deeper reset phase historically seen near major bottoms.
Amid these weak signals, institutional accumulation continues. MicroStrategy, now operating under the brand Strategy, disclosed a purchase of 520 BTC for $35 million, bringing its total holdings to 847,363 BTC. The firm, led by Michael Saylor, remains the largest corporate Bitcoin holder.
On a broader scale, long-term holders have aggressively expanded their positions this month. A separate market update revealed that long-term holder addresses added 125,000 BTC in June, marking the largest accumulation phase of the current cycle. This influx of coins into strong hands significantly reduces the available liquid supply, reinforcing the supply crunch narrative.
However, market volatility has triggered substantial liquidations as Bitcoin approached and retreated from six-figure price levels. Data compiled between 2023 and 2026 shows liquidation spikes exceeding 5,000 BTC during sharp corrections, with some events surpassing 10,000 BTC. These cascading liquidations forced leveraged bullish positions to close, exacerbating sell-offs. Currently, Bitcoin trades near the mid-$60,000 range after pulling back from cycle highs, but the combination of record-low OTC balances and heavy long-term accumulation paints a picture of tightening supply. Historically, such conditions have preceded strong market rallies once accumulation peaks, though the timing remains uncertain.
