Exchange Reserves Continue Decline
Bitcoin balances on exchanges dropped again this week, according to data from Glassnode. The decrease was about 400 BTC over seven days, bringing total exchange balances down to 171,900 BTC from 172,300 BTC. That’s a 0.23 percent decline, continuing the long-term trend of coins moving off trading platforms.
This might not sound like much, but when you consider the broader context, it becomes more significant. Exchange balances now represent just 0.87 percent of Bitcoin’s total supply of 19.8 million coins. At current prices, that’s about $18.7 billion worth of Bitcoin sitting on exchanges versus a total market cap of $2.16 trillion.
Monday’s Rally and Supply Dynamics
Monday saw Bitcoin’s price jump to around $115,000, and during that rally, exchanges recorded a withdrawal of less than 500 BTC. I think what’s interesting here is that this wasn’t a massive buying wave. Instead, it appears to be more about supply constraints – fewer sellers in the market rather than a surge of new buyers.
Bitcoin has since pulled back a bit, trading between $109,000 and $110,000, which is about 5 percent below last week’s peak. Analysts are watching support around $108,000 and resistance near $117,000. The market seems to be in a consolidation phase after the September highs, which isn’t unusual after significant price movements.
Long-Term Trend of Accumulation
The current exchange balance of 171,900 BTC is actually quite low when you look at historical data. Back in 2021, exchange balances were over 2.3 million BTC. The steady decline since then suggests investors are continuing to accumulate Bitcoin and move it to private wallets for long-term holding.
That 500 BTC withdrawal from Monday? It represents only 0.29 percent of current exchange reserves. But sometimes these small moves can influence market sentiment more than their actual size would suggest. We saw similar patterns in September 2025 when about 65,000 BTC left Kraken exchanges.
Market Sensitivity and Volatility Outlook
With fewer coins available on exchanges, markets become more sensitive to supply changes. When there’s less sell-side liquidity, even modest buying pressure can move prices more significantly. This current situation suggests the recent price rally wasn’t driven by massive demand inflows but rather by tightening supply conditions.
Exchange reserves at 171,900 BTC are approaching four-year lows, which could potentially lead to increased volatility. If selling pressure returns, there might be fewer coins available to absorb it, creating potentially larger price swings. But honestly, it’s hard to predict exactly how this will play out – markets have a way of surprising everyone.
The trend across major exchanges in both the U.S. and Asia shows similar patterns of declining balances, indicating this isn’t isolated to one region. It appears investors globally are acting as strong holders, preferring to keep their Bitcoin off exchanges for the long term.
