- Bitcoin’s Exchange Reserves are at multi-year lows, raising concerns about a possible supply shock.
- With fewer BTC available for trading, analysts predict a potential price surge if demand stays strong.
Bitcoin [BTC] reserves on spot exchanges have dropped to their lowest levels in recent years, according to CryptoQuant data. Exchange reserves grew between 2020 and 2022 but have been in a steep decline since.
Investors continue withdrawing BTC from exchanges and moving it to cold storage, reinforcing a long-term holding trend.
A shrinking exchange supply reduces the number of Bitcoins available for trading, which could create upward pressure on price if demand remains strong.
With Bitcoin showing an upward trend in 2024 and 2025, this shift suggests a tightening supply-demand balance.
Source: CryptoQuant
The ongoing reserve decline has raised speculation about a possible supply shock, as less BTC on exchanges may lead to price surges similar to past cycles.
On-chain data suggests strong Bitcoin accumulation
Bitcoin has been trading between $90,000 and $105,000, and data indicates ongoing accumulation. The 30-day moving average (30DMA) of the Exchange Inflow/Outflow Ratio has remained below 1, signaling that more BTC is leaving exchanges than entering.
Analysts often consider this a bullish signal, as it suggests investors are holding rather than selling.
When this ratio drops below 1, it suggests that outflows dominate inflows, a condition many professional investors view as a bullish signal.
If historical patterns hold, Bitcoin could see a short-term price increase once the selling pressure weakens.
Source: CryptoQuant
However, some of these outflows may be linked to routine asset transfers by centralized exchanges to custodial wallets, such as ETFs, institutional accounts, or OTC desks.
Bitcoin market trends and price movement
As of press time, Bitcoin was trading at $96,071, reflecting a -1.23% decline in the last 24 hours and a -1.43% drop over the past seven days.
The total circulating supply stands at 20 million BTC, giving Bitcoin a market capitalization of $1.9 trillion.
The Market Value to Realized Value (MVRV) Ratio, which measures market valuation against the price at which BTC was last moved, remains within a moderate range.
The all-time high of 5.27 on November 2013, reflected extreme optimism, while the all-time low of 0.548768 on January 2015, suggested deep undervaluation.
Source: IntoTheBlock
In the past year, the MVRV ratio hit a high of 2.75 on March 2024, and a low of 1.71 on September 2024. With only a +0.06% change in the last 24 hours, market sentiment appears stable.
Institutional transactions remain active
The number of Bitcoin transactions worth $100,000 or more shows fluctuations in large-scale activity. The last 24-hour transaction count stands at 15.43k, which also marks the 7-day low recorded on February 16, 2025.
Source: IntoTheBlock
On the 11th of February 2025, transactions peaked at 21.67k, indicating high institutional activity. Although transaction volume has declined from late January highs, it remains within a historically active range.
This suggests continued interest from institutional investors and high-net-worth individuals.
What’s next for Bitcoin?
With BTC reserves on exchanges shrinking, the possibility of a supply shock remains a key focus. If demand holds or increases, Bitcoin could experience upward price pressure.
As the market watches for the next major move, many are assessing whether this trend could signal the beginning of the next bull run.
