HODLers Keep Accumulating Bitcoin as BTC Supply on Exchanges Drops – Further Price Increase Is Likely

The supply of Bitcoin available on cryptocurrency exchanges has been on a dramatic decline since late 2024, suggesting that investors are accumulating BTC with the intent of holding over the long term.

According to data from CryptoQuant, there is currently 2.54 million BTC on exchanges, compared to 3.06 million BTC one year ago – a 17% decline. In the same time frame, the price of Bitcoin has increased by 118%.

Demand from Bitcoin HODLers is increasing

The continuing decline of the supply of BTC available on exchanges could be a signal that we’ll see an increase in the price of BTC in the short to medium term.

In addition to the decrease in the amount of Bitcoin held on exchanges, we have also been seeing an increase in demand from “permanent holders” of Bitcoin. These are Bitcoin addresses that grow their BTC holdings over time and don’t engage in spending.

Bitcoin Permanent Holder demand is accelerating.

Historically, this signals strong confidence and often precedes rallies. pic.twitter.com/o2xPydbUhi

— CryptoQuant.com (@cryptoquant_com) February 7, 2025

The algorithmic Bitcoin price prediction on CoinCodex is also bullish on Bitcoin’s medium-term prospects, as it’s forecasting the leading cryptocurrency to reach as high as $159,000 by May 2025. This would represent a 62% increase from the current Bitcoin price of $97,600.

2025 is poised to be a landmark year for BTC

One of the most important drivers of the current demand for Bitcoin has been the Donald Trump presidency, as his victory in the U.S. election spurred buyers to bring the price of Bitcoin above $100,000 for the first time ever.

The reason why Trump’s victory has been so bullish for Bitcoin is that Trump has positioned himself as a staunchly pro-crypto politician, promising a much more favorable regulatory environment for crypto assets.

On top of the changes to crypto regulation, Trump has also suggested that the United States should hold crypto assets as part of its reserves. Recently, the White House crypto and AI czar David Sacks stated that evaluating the feasibility of a Bitcoin reserve was one of the top priorities of his working group and called Bitcoin an “excellent store of value”.

Republican Senator Cynthia Lummis, who is arguably the most vocal advocate of Bitcoin in the legislative branch of the U.S. government, is arguing that the United States should accumulate 1 million BTC and hold it over a period of at least 20 years. She has also encouraged people to buy and hold Bitcoin to protect their wealth against the inflation of the US dollar.

🇺🇸 BULLISH: Senator Cynthia Lummis unveils a bold #Bitcoin reserve plan:

✅ Acquire 200,000 $BTC per year for 5 years.
✅ Hold the reserve for a minimum of 20 years.
✅ Goal: Cut U.S. national debt by 50% in two decades.

Could this strategy revolutionize America’s financial… pic.twitter.com/QGUKMMkbWB

— CoinCodex (@CoinCodex) January 28, 2025