Bitcoin has recently surged to a new all-time high, surpassing $125,700, before experiencing a slight retracement. This remarkable price action is underscored by significant shifts in the market, particularly regarding the balances of Bitcoin held on exchanges.
Data from Glassnode reveals that the total balance of Bitcoin on centralized exchanges has plummeted to 2.83 million BTC, marking the lowest level since mid-2019. Complementarily, CryptoQuant’s analysis shows an even lower figure of 2.45 million BTC, indicating a seven-year low. Notably, over the past two weeks, more than 114,000 BTC—approximately $14 billion—has exited exchanges. This trend of outflow suggests that investors are opting to secure their assets in self-custody or institutional vaults. The behavior points to a strong long-term conviction among holders, indicating their intent to hold rather than engage in quick trades.
The declining exchange balances have led some analysts to warn of potential liquidity shortages in the market. Notably, Matthew Sigel from VanEck pointed out the possibility that exchanges could run out of Bitcoin as early as Monday morning. This sentiment was echoed by investor Mike Alfred, who relayed information from a notable OTC desk operator. This operator suggested that they could be depleted of supply within hours unless prices rise to between $126,000 and $129,000. Such dynamics would place traders in a precarious position, potentially chasing a rally with fewer sellers available.
The shift of coins away from exchanges typically signals patient accumulation rather than speculative trading. With reserves at multi-year lows and market prices approaching new highs, the situation appears increasingly constrained. If demand continues to rise amidst dwindling liquid supply, the path ahead could likely tilt towards higher prices. However, the cryptocurrency landscape is known for its volatility and capacity to surprise even the most experienced market participants. As the situation develops, all eyes will remain on how liquidity and price dynamics unfold in the coming days.
