Bitcoin Supply on Exchanges Plummets to 6-Year Low – Bullish Surge Imminent?

Crypto markets brace as Bitcoin liquidity dries up on exchanges—a classic precursor to price fireworks.

Supply crunch incoming

With exchange reserves hitting levels not seen since 2019, the stage is set for volatility. Fewer coins available means even modest demand could send prices parabolic. Remember what happened last time?

Wall Street analysts scramble to update their models (read: flip a coin) while crypto natives stack sats. The irony? Traditional finance still can't decide if Bitcoin's a commodity, security, or existential threat to their 9-to-5.

One thing's certain: when supply gets scarce in this market, things get interesting fast. Buckle up.

• The supply of Bitcoin on exchanges has reached its lowest level since 2018.

• Investors moving BTC to self-custody indicate a trend of long-term holding.

• Supply squeeze intensifies as BTC leaves exchanges, supporting potential price surge.

Bitcoin’s supply on exchanges has dropped to levels last seen in 2018. According to new data shared by Bitcoinensus, only about 14.5% of BTC’s total supply is sitting on exchanges. This decline is also an indication that a large number of investors are not leaving coins on trading exchanges but moving them into their own wallets. It indicates that they intend to keep them rather than sell them soon.

Bitcoin Exchange Exodus Hints At Future Price Rise

Moving coins out of exchanges means that there are fewer coins to be sold quickly. Traders call this a “supply squeeze.” A smaller supply often pushes prices up if demand remains strong. The chart from Glassnode shows this trend clearly. While the percentage of BTC on exchanges has been falling, the price has been moving higher.

Source: X

A lower balance on exchanges reflects rising investor confidence. People are more comfortable keeping Bitcoin in self-custody wallets. Many see this as a long-term bet on Bitcoin’s future value. It also means the risk of sudden large sell-offs drops because there is less BTC available for instant trading.

Market watchers see this as a sign that a strong price MOVE might be coming. When supply becomes scarce, buyers need to pay more to convince holders to sell. In the past, big price runs have often followed sharp declines in exchange balances. Analysts and traders are confident that this trend may recur.

Bullish Trend Accompanying Reduction of BTC Supply

The value of bitcoin is almost reaching its all-time high values. The orange line indicates the exchange balances continue to go down. This two-sided movement is a pointer that demand is good and the supply is increasingly weak.

Thinner supply on exchanges may translate to increased fluctuation of prices. The next few weeks will provide a lot of clues in inflows and outflows of exchange.