The supply of Bitcoin on exchanges has fallen below 15% for the first time since 2018.
The decreasing supply on exchanges and the balance of over-the-counter (OTC) trading point to a "supply shock" and long-term accumulation.
The price of BTC must remain above $100,000 to ensure an upward trend.
Bitcoin exchange reserves have dropped below 15%, indicating that a supply shock is approaching as institutional demand for exchange-traded funds (ETFs) grows.
According to Glassnode data, the supply of Bitcoin (BTC) on exchanges has fallen to a nearly seven-year low, dropping to 14.5% for the first time since August 2018.
The reduction in Bitcoin supply on exchanges may signal a price increase driven by a "supply shock," which occurs when strong buyer demand meets a decrease in available BTC.
This trend typically indicates rising investor confidence and a shift towards long-term holding. For example, BTC is often transferred to cold storage or self-custody wallets, reducing the liquid supply available for trading.
Whales typically withdraw BTC after purchasing, indicating ongoing accumulation. As the supply of coins available for sale decreases, short-term selling pressure also diminishes.
Over-the-counter (OTC) platforms facilitating large private cryptocurrency transactions are also experiencing supply tightening. These platforms usually match buyers and sellers but rely on maintaining BTC reserves for quick and reliable trade execution.
The cumulative balance of BTC held by known OTC addresses is at a historical low. CryptoQuant data shows that since January, the balance of OTC addresses related to miners has decreased by 21%, now standing at a historical low of 155,472 BTC.
This figure reflects inflows from over two unique "1-hop" addresses related to mining pools, excluding miners and centralized exchange addresses.
The increasing scarcity of supply on exchanges and OTC platforms may amplify price increases as demand exceeds supply.
Crypto Chiefs stated in a recent X post: "The available Bitcoin balance for OTC trading is in free fall," adding:
Despite a 2.85% drop over the past two days, Bitcoin remains strong above the critical psychological support level of $100,000, a level it has maintained since May 28.
According to Lau, founder of Focusw3b Agency, Bitcoin's resilience above the $100,000 mark is supported by "strong institutional demand" and "shrinking" supply.
This demand is most evident in the inflows into spot Bitcoin ETFs, which have recorded inflows for 15 consecutive days.
According to SoSoValue data, this continuous inflow began on June 9, with inflows exceeding $386 million, continuing into Monday with an additional $102 million. In total, over $4.7 billion has flowed into spot Bitcoin ETFs in the past 15 days.
Maintaining the psychological support level of $100,000 is crucial for ensuring Bitcoin's upward potential and avoiding significant downward volatility.
CoinGlass data indicates that a potential pullback below $100,000 would liquidate all leveraged long positions on exchanges, totaling over $6.42 billion.
Many analysts suggest that the likelihood of Bitcoin falling below $100,000 is decreasing, setting optimistic targets ranging from $140,000 to over $200,000 for the remainder of 2025.
Related: June Data Visualization: Bitcoin (BTC) Hashrate Drops 15%, 26 Companies Include Bitcoin on Their Balance Sheets
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should conduct their own research when making decisions.
Original article: “Less than 15% Bitcoin Left on Crypto Exchanges Signals Supply Problem”
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