Bitcoin exchange reserves dropped to 2.76 million BTC, reaching one of the lowest levels on record. The decline continued through 2025 even as the cryptocurrency corrected toward $92,000. Investors withdrew coins during the selloff rather than sending them to exchanges.
What Happened: Record Low Reserves
XWIN Research Japan documented the sharp decline in exchange balances throughout 2025 in a report released ahead of the Federal Open Market Committee meeting. The data shows total Bitcoin held on centralized exchanges fell to 2.76 million BTC.
The timing stands out. During the November through December selloff, exchange balances dropped faster instead of rising. The report marks this period in red on its chart, showing accelerating outflows while price declined.
Investors moved BTC into long-term custody rather than preparing to sell. The behavior suggests confidence over capitulation.
Price currently trades around $92,613, hovering above the 200-day moving average.
Bitcoin broke its ascending structure in late November. The drop pushed the cryptocurrency toward the high-$80,000 range. Volume increased during the decline but has since shrunk, indicating exhaustion among short-term sellers.
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Why It Matters: Supply Tightening
Fewer coins sitting on centralized exchanges means less Bitcoin available for immediate sale. The decline stems from long-term holders and institutional entities moving BTC into self-custody or cold storage, not short-term speculation.
Historical patterns show sharp price declines typically trigger waves of exchange inflows as investors prepare to exit positions. This cycle tells a different story. Exchange balances kept falling during the correction.
The divergence between price action and on-chain behavior signals underlying strength.
A future supply shock becomes increasingly plausible as reserves approach historic lows. Short-term volatility may continue around macro catalysts, but the broader structure points toward a market tightening its available supply.
For meaningful recovery, BTC must reclaim the $95,000 to $97,000 area where previous support turned into resistance. Failure to break that zone would likely keep the market in consolidation with risks of retesting the 200-day moving average.
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