The amount of Bitcoin held on crypto exchanges has dropped significantly, now sitting at just 14.5%—a level not seen since August 2018, according to recent data from Glassnode. This shrinking exchange supply could signal a brewing price jump, as fewer coins available for trading often result in heightened demand pressure.
Such a trend often reflects growing confidence among investors and a preference to hold Bitcoin for the long haul rather than trade it actively.When fewer Bitcoins are available for purchase, especially in times of strong buying interest, the limited supply can lead to upward price movement. This condition, sometimes described as a “supply shock,” happens when demand rises but available coins become scarce.
Large-scale investors, often referred to as “whales,” are also pulling their holdings off exchanges after purchases, reinforcing the trend of accumulation. With fewer coins circulating in the open market, the selling pressure on short-term traders typically decreases.
Over-the-counter (OTC) trading platforms, which help facilitate high-volume private transactions between major buyers and sellers, are also seeing lower Bitcoin balances. These desks need to hold reserves to meet demand quickly, but that reserve is shrinking. According to data from CryptoQuant, the amount of Bitcoin in OTC wallets connected to miners has dropped by 21% since January. The wallets now hold just 155,472 BTC, the lowest ever recorded.
This data focuses on wallets one step away from mining pools and excludes those associated with centralized exchanges or direct miner addresses. The trend of falling supply in both public and private markets could further support price increases if demand keeps rising.
Despite recent minor losses of around 2.85%, Bitcoin has stayed above the critical $100,000 mark since May 28. According to Lau, founder of the Focusw3b Agency, this level is being held up by solid interest from institutional investors and a noticeable reduction in available supply.
Bitcoin spot ETFs are a major part of this demand, bringing in funds for 15 straight days. Based on SoSoValue data, the trend started on June 9, pulling in more than $386 million on the first day and another $102 million by the following Monday. In total, more than $4.7 billion has flowed into Bitcoin spot ETFs during this streak.
Analysts warn that if Bitcoin drops below $100,000, it could trigger liquidations of more than $6.42 billion in leveraged long positions. Still, many market experts believe that such a drop is unlikely, with price predictions for late 2025 ranging from $140,000 to well over $200,000.
Centralized exchanges like Coinbase Global Inc. (NASDAQ: COIN) will be watching supplies of the BTC available for active trading and tweaking their projections accordingly over the coming months.
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