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Why Do Bitcoin Exchange Deposits Matter?
Centralized cryptocurrency exchanges like Binance, Bitget, Bitfinex, Coinbase, Bitstamp, and others hold a large portion of the BTC in circulation. It is typically worth millions of BTC or hundreds of billions of dollars. When there is an increasing influx of BTC into exchanges, it usually indicates increasing selling activity that can bring the spot price down. On the other hand, if the exchange balances are depleting, the situation points to an increased buying activity that can drive the spot price upwards.
According to a popular crypto exchange balance reporter on X, the exchange balances are now the lowest they have ever been in the last 6 years. They tweeted:
“SIX YEARS LOW
2,861,359 $BTC (-18,896 in 24h)”
 
These record-low exchange reserves were probably a big catalyst in propelling the premier digital currency to new ATH at the end of last week.
BTC Exchange-Bitcoin/USD Correlation
Here is the relationship between the BTC spot price and exchange reserves for the last 10 years:
The correlation graph shows that when the exchange reserves plummet hard, the Bitcoin price index jumps upwards, sometimes with a delay. Overall, exchange reserves have been trending largely downward for a better part of the last 2 years, while Bitcoin/USD has continued to trend upwards.
We have already gone below 5-year lows and are currently hovering near 6-year lows. This is great news for the bullish cause, as a supply shock as large as this is likely to keep the pressure on buyers and push the market even higher.
The Future
The recent decrease in BTC exchange reserves shows the bull market is heating up considerably at the start of the last quarter of 2025. Bitcoin, as well as other top digital assets, is likely to continue to post new ATHs. However, the exchange balance statistic is essential because it can provide traders with a fair warning of an imminent market top, allowing them to take advantage of this information.
Source: https://zycrypto.com/bitcoin-exchange-balances-at-6-year-low-as-bull-market-speeds-up/