Bitcoin has soared to unprecedented heights, achieving a new all-time high that surpassed $125,700 on Coinbase on Sunday morning. This significant milestone marks an impressive 11.5% increase over the past week, coinciding with what traders are referring to as “Uptober.” The previous record sat at $124,500, set on August 14, but following a notable pullback of 13.5% by September 1, Bitcoin has demonstrated a robust recovery.
One notable trend accompanying this price surge is the decline in the total Bitcoin balance on centralized exchanges, which has decreased to 2.83 million BTC—the lowest level since early June 2019, when Bitcoin was trading around $8,000. Data from CryptoQuant paints an even clearer picture, indicating a total exchange reserve of just 2.45 million BTC, marking a seven-year low. This drop has been attributed to a significant outflow of over 114,000 BTC, valued at more than $14 billion, leaving exchanges in the last two weeks alone.
As Bitcoin is withdrawn from exchanges and moved into self-custody or institutional funds, it signals that many holders are opting to retain their assets long-term. Bitcoin available on exchanges is often perceived as an immediate supply that could impact market liquidity. Matthew Sigel, head of digital assets research at VanEck, has remarked that exchanges are experiencing a depletion of Bitcoin, with some over-the-counter (OTC) trading desk operators indicating potential shortages as futures markets reopen.
Investor Mike Alfred reported that a major OTC desk operator suggested they would completely sell out of Bitcoin within two hours of futures opening unless prices rise to between $126,000 and $129,000, indicating an urgent demand against limited supply.
From a technical standpoint, analysts have identified key resistance levels for Bitcoin’s price movement. Rekt Capital noted that if Bitcoin convincingly breaks past the $126,500 mark, it could rapidly rise higher, with the $126,100 level acting as an upper boundary of a broadening range pattern that has been developing since mid-July. This breakout would then focus attention on the $135,000 level, which market makers currently view as a potential resistance threshold, according to activity tracked in Deribit-listed options.
Market makers are reported to hold a net long gamma position at $135,000, suggesting they are strategically trading against market direction to maintain a market-neutral stance. This tactic generally helps to stabilize price volatility. Furthermore, the $140,000 level has emerged as a significant target, with data showing that it is the second-most popular strike price on the exchange, boasting a notional open interest exceeding $2 billion.
Such high open interest in call options implies that many traders expect Bitcoin to approach or even exceed this level. Those who sold these options may have a vested interest in keeping the price below the strike price.
While Bitcoin trades in this uncharted territory near record highs, there remains a considerable portion of the population that still lacks a fundamental understanding of the cryptocurrency, as noted by Nate Geraci of Nova Dius. The ongoing developments in Bitcoin’s market activity could have profound implications for the broader cryptocurrency landscape and its adoption.
