A recent chart from CryptoQuant reveals a striking divergence between Bitcoin’s exchange reserves and its market price.
As of late May 2025, total BTC held across all centralized exchanges has fallen to 2.5 million, the lowest level in over three years.
At the same time, Bitcoin has climbed above $104,000, suggesting growing long-term confidence and a possible shift in market dynamics.
What the Data Shows: Declining Supply, Rising Demand
The blue line in the chart tracks the Exchange Reserve, or the total number of BTC held in exchange wallets. Since mid-2022, this metric has steadily declined—from over 3.4 million BTC to just 2.5 million today.
Meanwhile, the white line shows Bitcoin’s USD price, which has followed a mostly upward trajectory—especially accelerating from Q4 2023 into 2025.
This inverse relationship typically indicates a supply squeeze. As investors move BTC off exchanges—usually to cold storage—it signals a preference for holding over selling. When this trend aligns with rising prices, it often strengthens bullish sentiment.
Implications for Market Structure
This pattern supports the theory that the current rally is not purely speculative. Reduced exchange reserves mean that available BTC for trading is shrinking, potentially tightening supply during bullish momentum.
Historically, similar trends have preceded significant price expansions as demand outpaces liquid supply. The drop below the 2.6M level marks a critical milestone and could help explain Bitcoin’s surge past $100K in recent months.
With ETFs, institutional interest, and macroeconomic uncertainty in play, Bitcoin’s on-chain behavior continues to reflect a maturing market with growing long-term conviction.
Conclusion: Fewer Coins, More Demand = Bullish Setup
This chart reinforces a strong macro narrative: investors are pulling Bitcoin off exchanges while the price climbs. If demand persists and supply continues to tighten, BTC could be poised for further gains.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/bitcoin-exchange-reserves-plunge-to-multi-year-low/