Recent data from CryptoQuant reveals that Bitcoin’s reserves on major exchanges have reached their lowest levels in several years. After experiencing growth between 2020 and 2022, exchange reserves have been steadily declining since then.
Investors are actively withdrawing their Bitcoin from exchanges and transferring them to cold storage, indicating a strong inclination towards long-term investment.
The diminishing supply of Bitcoin on exchanges results in a reduced availability for trading, potentially leading to upward pressure on prices if the demand remains robust.
Given Bitcoin’s positive performance in 2024 and 2025, this shift indicates a tightening balance between supply and demand.
Analysis of On-chain Data Indicates Significant Bitcoin Accumulation
Bitcoin’s price has been fluctuating between $90,000 and $105,000, accompanied by ongoing accumulation trends. The 30-day moving average (30DMA) of the Exchange Inflow/Outflow Ratio has consistently remained below 1, indicating more Bitcoin leaving exchanges than entering them.
This data is often regarded as a bullish sign, suggesting that investors are more inclined towards holding rather than selling their assets.
A ratio below 1 signifies a dominance of outflows over inflows, a factor that many professional investors interpret as a positive indicator. Consequently, when selling pressure decreases, Bitcoin may witness a short-term price surge.
Nevertheless, some outflows could be attributed to routine asset transfers by centralized exchanges to custodial wallets, including ETFs, institutional accounts, or OTC desks.
An Overview of Bitcoin Market Trends and Price Fluctuations
At the time of writing, Bitcoin’s price stands at $96,071, displaying a 1.23% decline over the past 24 hours and a 1.43% drop in the last seven days.
With a circulating supply of 20 million BTC, Bitcoin’s market capitalization amounts to $1.9 trillion.
The Market Value to Realized Value (MVRV) Ratio, which gauges market valuation against the price of the last BTC movement, remains relatively stable, reflecting moderate levels.
Historically, extreme optimism was observed with an all-time high MVRV ratio of 5.27 in November 2013, while deep undervaluation was indicated by an all-time low of 0.548768 in January 2015.
Over the past year, the MVRV ratio peaked at 2.75 in March 2024 and hit a low of 1.71 in September 2024. With a minimal 0.06% change in the last 24 hours, the market sentiment appears to be steady.
Continued Institutional Engagement in Bitcoin Transactions
Fluctuations in the number of Bitcoin transactions exceeding $100,000 highlight variations in large-scale activity. The latest 24-hour transaction count stands at 15.43k, marking a seven-day low recorded on February 16, 2025.
On February 11, 2025, transactions peaked at 21.67k, signifying a substantial institutional involvement. Despite a decline from the highs of late January, transaction volume remains within a historically active range.
This sustained level of activity indicates enduring interest from institutional investors and high-net-worth individuals.
Future Prospects for Bitcoin
With the decline in BTC reserves on exchanges, all eyes are on the potential supply shock. If demand maintains or increases, Bitcoin could face upward pressure on its price.
As the market anticipates the next significant development, many are considering whether this trend signals the onset of the next bullish cycle.