Bitcoin continues to fluctuate around its previous all-time high, stabilizing around the $109,000 mark despite a slight increase of 1.9% over the past day. The asset reached a 7-day high of $110,307 but has yet to reclaim the record high of $111,814 set in May.

While short-term price movements remain within a narrow range, on-chain data suggests deeper structural developments may shape Bitcoin's trajectory in the coming weeks.

As attention focuses on Bitcoin's breakout potential, some analysts are shifting their focus to supply dynamics for clues. A notable observation comes from Chairman Lee of CryptoQuant, who has identified a significant drop in the amount of BTC held on centralized exchanges.

This trend may serve as an important indicator of future price behavior, especially amid institutional demand and exchange activity.

Bitcoin Exchange Reserves Fall to Multi-Year Lows

Chairman Lee's analysis emphasizes the continuous decline of Bitcoin held on exchanges, with reserves decreasing to a multi-year low of 2.4 million BTC. This figure is down from over 3.1 million BTC reported in mid-2023.

The continuous decrease in exchange balances is understood as a signal that selling pressure is easing, which often occurs before prices rise.

According to Lee, 'The ongoing decline in reserves indicates that selling liquidity is drying up... Traditionally, such conditions—when the amount of BTC held on exchanges is low—often occur before strong price expansion when demand outstrips supply.'

In previous market cycles, including the 2020–2021 bull run, similar declines in foreign exchange reserves have led to significant price increases for Bitcoin.

This logic is based on the fundamental supply-demand mechanism: as BTC becomes scarce on exchanges, any increase in demand, particularly from ETFs or institutional buyers, could lead to faster price growth.

Lee emphasizes that the current trend could serve as a fundamental driver, potentially supporting further momentum if the current demand pattern remains intact.

Binance Dominates Whale Trading Flow

Another piece of the market structure puzzle comes from analyst Crazzyblockk of CryptoQuant, who has studied large-scale BTC transactions on major centralized exchanges. According to his report, Binance maintains its position as the dominant venue for Bitcoin whale activity.

In this context, whale flow is defined as daily cash flow in or out exceeding 1,000 BTC. Binance recorded a total whale inflow and outflow of 31.36 million BTC, alongside 53.2 million whale transactions, significantly more than any other exchange.

Notably, these figures do not reflect individual BTC, but rather the total trading volume, including repeated transactions of the same coin. High trading volume indicates Binance's popularity due to its liquidity and infrastructure, allowing 'whales' to trade, transfer ownership, and arbitrage with minimal obstacles.

Data also ranks HTX Global and Kraken in second and third positions for whale inflows, although their volumes are significantly lower than Binance's.