Less than 15% Bitcoin left on crypto exchanges signals ‘supply problem’
Key takeaways:
- Bitcoin’s percent supply on exchanges has dropped below 15% for the first time since 2018.
- Depleting exchange supply and OTC balances, pointing to “supply shock” and long-term accumulation.
- BTC price must remain above $100,000 to secure the upside.
Bitcoin exchange reserves have fallen below 15%, suggesting a supply shock as institutional demand from exchange-traded funds (ETFs) grows.
Percentage of BTC on exchanges drops to seven-year lows
Bitcoin percent supply on exchanges has dropped to near seven-year lows, falling to 14.5% for the first time since August 2018, Glassnode data shows.
BTC percent balance on exchanges. Source: Glassnode
Diminishing Bitcoin supply on exchanges may signal an incoming price rally fueled by a “supply shock,” which occurs when strong buyer demand meets decreasing available BTC.
This trend usually signals rising investor confidence and a shift toward long-term holding. For example, BTC is typically transferred to cold storage or self-custody wallets , reducing the liquid supply available for trading.
Whales often withdraw BTC after buying, signalling ongoing accumulation . With fewer coins available for sale, short-term sell pressure diminishes.
Over-the-counter Bitcoin balances hit all-time lows
Over-the-counter (OTC) desks, which facilitate large, private cryptocurrency trades, are also experiencing a tightening supply. These desks typically match buyers and sellers but depend on maintaining BTC reserves for swift and reliable trade execution.
The cumulative balance of BTC held in known OTC addresses is at historic lows. CryptoQuant data shows a 21% decline in OTC address balances linked to miners since January, now down to an all-time low of 155,472 BTC.
This figure reflects inflows from over two unique “1-hop” addresses tied to mining pools, excluding miners and centralized exchange addresses.
BTC: OTC address balance. Source: Glassnode
This increasing scarcity on exchanges and OTC desks can amplify price surges as demand outstrips supply.
“The Bitcoin balance available OTC is in freefall,” Crypto Chiefs said in a recent X post, adding:
“We have never seen such a divergence between balance and price! You are witnessing a supply problem play out.”
Bitcoin is resilient on “strong institutional demand”
Bitcoin remained strong above the key $100,000 psychological support, a level it has held since May 28, despite seeing 2.85% losses over the last two days.
Bitcoin’s resilience above the $100,000 mark is backed by “strong institutional demand” and supply “shrinking,” according to Focusw3b Agency founder, Lau.
This demand is most evident in spot Bitcoin ETF inflows , which have recorded 15 days of consecutive inflows.
According to data from SoSoValue, the streak began on June 9, with inflows of over $386 million and continued through Monday, with an additional $102 million in inflows. In total, over $4.7 billion in capital moved into spot Bitcoin ETFs over the past 15 days.
Bitcoin ETF inflow data from June 6 to June 10. Source: SoSoValue
Maintaining the $100,000 psychological support will be critical for securing Bitcoin’s upside and avoiding significant downside volatility.
A potential Bitcoin correction below $100,000 would liquidate over $6.42 billion worth of cumulative leveraged long positions across all exchanges, CoinGlass data shows.
Bitcoin exchange liquidation map. Source: CoinGlass
Numerous analysts say that Bitcoin dropping below $100,000 is becoming less likely, setting optimistic targets for the rest of 2025 ranging from $140,000 to above $200,000.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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