Bitcoin exchange reserves have hit their lowest levels in years, with significant withdrawals from major cryptocurrency exchanges like Binance and Coinbase. Over 171,000 Bitcoin have been moved off these platforms since the U.S. presidential election in November 2024, signaling a shift in investor behavior. This trend of declining exchange reserves began in 2021, reflecting a growing belief in Bitcoin as a long-term investment despite market fluctuations. By October 2021, exchange reserves stood at 3.2 million BTC, but by December 2024, they had dropped to 2.46 million BTC.
This decline in Bitcoin on exchanges is mirrored by data from Glassnode, which shows an increase in the number of Bitcoin held by long-term investors. In the last 30 days, Glassnode reported an addition of 185,000 BTC to the illiquid supply, bringing the total amount of Bitcoin held by long-term investors to 14.8 million, or roughly 75% of the current circulating supply. This suggests that a large portion of Bitcoin is being held rather than traded, reinforcing the notion that many investors see it as a store of value rather than a short-term trade.
Despite this tightening supply, Bitcoin's price saw a decline of about 2% recently, dipping below the $94,000 mark. This drop led to liquidations across the market, with $578.6 million worth of positions being liquidated in a single day. Of this, $90 million came from long positions in Bitcoin, indicating that many traders had been betting on Bitcoin’s continued upward movement. Even with this price correction, market sentiment remains strong, with experts predicting a potential rise in Bitcoin's value by the end of the year.
After President Trump’s re-election, Bitcoin’s price surged to $99,600, and some analysts believe that the cryptocurrency could surpass $100,000 before 2024 ends, driven by a potential supply shock. As Bitcoin continues to be moved off exchanges, its available supply becomes more constrained, which could further support price increases. Additionally, with the anticipation of crypto-friendly policies under the new administration, the outlook for Bitcoin remains positive.
Bitcoin's reserves on exchanges continue to fall, indicating that more investors are holding their coins long-term. This reduced supply, coupled with the growing adoption of Bitcoin, suggests that the cryptocurrency could see significant price increases in the near future, despite short-term volatility.
