The amount of Bitcoin held on exchanges has dropped to its lowest level since 2019 โ and analysts are warning of an imminent supply shock that could shake the market and drive prices higher.
๐น Less Than 2.9 Million BTC on Exchanges
According to Glassnode data, exchange balances of BTC have fallen below 2.9 million coins, marking a new six-year low. Since mid-April, Bitcoin holdings on exchanges have been steadily declining โ from 3.05 million down to under 2.9 million today, with over 150,000 BTC moving into cold storage wallets.
๐น Flashback to 2019: A 233% Rally Followed
The last time balances fell below this threshold was in 2019 โ and in the following years, Bitcoin surged over 230%. Similar to that period, today's market is showing signs of strong long-term conviction from holders.
โExchange balances are at their lowest point in 6 years. Investors are accumulating and moving off exchanges,โ noted Whale Insider on X.
๐น What Does It Mean for the Market?
When BTC leaves exchanges, it typically signals that investors are not planning to sell, reinforcing confidence in long-term price appreciation. On the other hand, a surge in exchange balances often hints at incoming selling pressure.
This kind of sharp decline in liquid supply can trigger a supply shock, where buyers compete for a dwindling number of available coins โ a scenario that has historically led to aggressive price rallies.
๐น Corporate Treasuries and ETFs Drive the Drain
The sharp drawdown in exchange balances is largely driven by growing interest from corporations and institutional investors. Just last week, corporate treasuries acquired 5,898 BTC, pulling these funds off exchanges into long-term custody.
Between April and July, over 100,000 BTC were withdrawn by financial firms, with MicroStrategy โ led by Michael Saylor โ setting the pace. Other firms like ProCap Financial and GameStop followed suit.
Interest in Bitcoin ETFs is also accelerating. According to S&P Global, demand has been surging since the ETF launches. These funds now hold over 800,000 BTC, significantly reducing the circulating supply on exchanges.
๐น Kiyosakiโs Warning Despite Bullish Metrics
Despite the clear bullish indicators, Robert Kiyosaki, author of Rich Dad, Poor Dad, recently predicted that Bitcoin could see a price dip in July. Whether that comes to pass, or the supply shock drives prices higher, remains to be seen.
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