Bitcoin (BTC) reserves on exchanges have dropped below 15%, indicating supply shock as demand from institutional funds like ETFs increases.

The ratio of BTC on exchanges has dropped to its lowest in 7 years

Data from Glassnode shows that the supply ratio of Bitcoin on exchanges has dropped to its lowest in 7 years, around 14.5%, for the first time since August 2018.

BTC ratio on exchanges | Source: Glassnode

The sharp decline in Bitcoin supply on exchanges may signal an upcoming price surge due to 'supply shock', occurring when strong buying demand meets reduced available BTC.

This trend often signals investor confidence and a shift towards long-term holding. For example, BTC is often transferred to cold wallets or self-custody wallets, reducing the available liquidity supply for trading.

Whales often withdraw BTC after buying, signaling ongoing accumulation. With less BTC available for sale, short-term selling pressure will ease.

OTC Bitcoin balance hits all-time low

OTC exchanges, where large, private crypto transactions are facilitated, are also facing tightening supply conditions. These exchanges typically match buy and sell orders but rely on maintaining BTC reserves for quick and reliable transaction execution.

The total BTC balance held in OTC addresses is at an all-time low (ATL). Data from CryptoQuant shows that the balance of OTC addresses linked to miners has decreased by 21% since January, currently at ATL level of 155,472 BTC.

This figure reflects the cash flow from two single '1-hop' addresses linked to mining pools, excluding miners and centralized exchange addresses.

BTC balance in OTC addresses | Source: Glassnode

The scarcity on exchanges and OTC may amplify price surges when demand exceeds supply.

'The available Bitcoin balance on OTC exchanges is plummeting,' Crypto Chiefs stated in a recent post on X.

'We have never seen such a large divergence between balance and price! People are witnessing the supply issue unfold.'

Bitcoin is recovering thanks to 'strong demand from institutions'

Bitcoin has maintained the important psychological support level of $100,000 since May 28, despite witnessing a slight decline of 2.85% in the past two days.

According to Lau, founder of Focusw3b Agency, Bitcoin's resilience above $100,000 is supported by 'strong institutional demand' and 'decreasing' supply.

This demand is most apparent through the cash flow into Bitcoin spot ETF funds, with 15 consecutive days of recorded inflows.

According to a report from SoSoValue, the growth streak began on June 9, with inflows of over $386 million and continued until Monday, with an additional $102 million. In total, over $4.7 billion of capital has flowed into Bitcoin spot ETF funds in the past 15 days.

Cash flow data into Bitcoin ETF funds from June 6 to June 10 | Source: SoSoValue

Maintaining the psychological support level of $100,000 will be crucial to ensure Bitcoin's growth momentum and avoid significant downturns.

Data from CoinGlass shows that the possibility of a correction below $100,000 would trigger liquidations of over $6.42 billion worth of accumulated long leveraged positions across all exchanges.

Bitcoin liquidation chart | Source: CoinGlass

Many analysts say that Bitcoin is unlikely to drop below $100,000, while setting optimistic targets for the remainder of 2025 ranging from $140,000 to over $200,000.



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