Bitcoin (BTC) Faces Volatility Risk as Exchange Reserves Hit an All-Time Low

• The number of Bitcoin (BTC) held on various centralized exchanges has fallen to below 2.5 million BTC, signalling a potential upsurge in the short to medium term. 
• Multiple analysts have predicted that Bitcoin could break its current all-time high price level to set a new record within the $180,000 and $250,000 range. 

Bitcoin (BTC) is seeking to overturn the 3% loss recorded on its weekly price chart after “printing” 1.3% gains on its 24-hour chart to extend its monthly gains to 9%.

According to our market data, the asset has staged a quick rebound from its daily low of $103k to $105.8k at press time, as it attempts to make another decisive move above the $106k resistance level.

Confirming this trend, analysts at CryptoQuant have hinted that Bitcoin reserves on centralized exchanges are reducing by a significant margin, as mentioned in our previous news story. Specifically, the current exchange reserve has plunged below 2.5 million BTC as of late May.

As illustrated in the chart below, the price of Bitcoin (white line) is making an upward surge while the centralized exchange reserve (blue line) is moving downward.

Historically, this has been associated with long-term decisions of investors to withdraw assets for self-custody in anticipation of an upcoming upsurge. Analysts also believe that this ongoing trend is largely driven by institutional investors.

Rising Institutional Interest to Trigger Another Bitcoin Upsurge?

Data suggests that wallets holding at least 1,000 and 10,000 BTC have been accumulating aggressively and subsequently withdrawing to their cold wallets. As highlighted in our previous blog post, MicroStrategy, for instance, added 7,390 BTC to send its total holdings to 576,230 BTC in May. According to our recent update, it is aiming for a historic $84 billion purchase.

Similarly, companies like GameStop and Japan-based Metaplanet have been accumulating assets recently. Meanwhile, Metaplanet is raising an additional $50 million through private placement of zero-interest bonds to purchase more Bitcoin, as noted in our earlier discussion.

Amidst the backdrop of this, the spot Bitcoin Exchange Traded Funds (ETF) has also been recording an incredible amount of inflow, with $5.23 billion entering the market in May alone.

According to analysts from VanEck, Galaxy Digital, and Fundstrat, the rising Institutional adoption coupled with regulatory tailwinds could send the price of Bitcoin to between $180,000 and $250,000 by the end of the year. As indicated in our last analysis, HC Wainwright’s analyst Mike Colonnese estimates the price to be around $220k.

Meanwhile,  Bitcoin Layer author Nik Bhatia has something different to say:

Bitcoin rose with yields in 2021, on growth, stimulus, and reflation. It’s rising with yields again in 2025. But this time, the context is different. It’s not optimism driving this move, it’s a search for neutrality.

For on-chain analyst Willy Woo, the buy-side liquidity continues to dominate the market as the “Risk-Signal” declines. Per his observation, this could set the market up for an explosive run as happened in the past. Looking into this, we found that the last time this happened was between 2023 and 2024. At that time, the price of Bitcoin surged by 200%.

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