Bitcoin reserves on centralized cryptocurrency exchanges have fallen to a multi-year low, according to data from CryptoQuant.
In the past month alone, over 51,000 BTC have been withdrawn from major trading platforms.
This trend indicates a reduction in the liquid supply of the leading cryptocurrency. It also suggests that many market participants prefer non-custodial storage of coins, focusing on the long term.
In October 2021, when CryptoQuant introduced this metric, exchange reserves stood at 3.2 million BTC; the current figure is approximately 2.6 million BTC.
“Bitcoin reserves on exchanges have decreased this year due to the distribution of Mt.Gox funds to creditors, as our total reserve data included this exchange’s holdings. Additionally, the reduction in reserves on Coinbase has lessened potential selling pressure on bitcoin,” noted CryptoQuant’s Head of Research, Julio Moreno, in a conversation with The Block.
The expert added that a significant portion of funds is being transferred from the largest American cryptocurrency exchange to specific wallets for long-term storage.
“In the case of Coinbase, this indicates growing demand from institutional players, such as companies and spot ETFs,” Moreno explained.
“Whale” Pressure
Amid the reduction in exchange reserves, there is an accumulation of digital gold among “new institutionals.”
“We are witnessing unprecedented buyer pressure due to a new wave of accumulation. New ‘whales’ are buying bitcoin, pushing its price upward. Currently, they hold 1.97 million BTC. It is important to note that this is not only the result of spot bitcoin ETF activity; other major players are also involved,” noted CryptoQuant analyst J. A. Maartunn.
According to the analysis provided to the publication, there is strong buyer pressure on Coinbase and Bitfinex, while short positions dominate on Binance and Bybit.
As explained by CryptoQuant experts, large investors are steadily accumulating bitcoins, while smaller players are reducing their “digital reserves.” Such developments often lead to most exchange users depleting their resources, and then, as market sentiment improves, they have to repurchase bitcoin at significantly higher prices.
“On the other hand, institutional players are strengthening their positions ahead of improved market sentiment. This will compel them to distribute [reserves] amid the next price growth cycle,” the experts emphasized.
The analytical company classifies “new” whales as wallets not owned by miners or exchanges with more than 1,000 BTC; the “age” of the coins does not exceed 155 days.
Earlier, CryptoQuant author Axel Adler Jr. noted that users with balances exceeding 1,000 BTC have accumulated an additional 1.5 million coins over the past six months.