Bitcoin Exchange Reserves Shrink to 2.67M, Fueling Rally Speculation

Bitcoin exchange reserves — Bitcoin held on centralized exchanges has fallen to a multi-month low, a trend analysts say could create a supply-demand imbalance favorable for a sustained price rally.

According to a CryptoQuant report, the amount of bitcoin on exchanges has dropped to 2.67 million from 2.8 million since February. The researcher noted that the decline in readily available supply is occurring even as the market recovers from recent lows, a notable development.

“If buying demand continues to improve while exchange supply remains low, BTC could benefit from a supply-demand imbalance, creating favorable conditions for a longer-term upward trend,” the report stated. The data suggests investors may be moving bitcoin into long-term cold storage.

Bitcoin’s price was recently $83,485, up 8% over the past 30 days following a strong third quarter. The asset has rallied since August, a move analysts attribute in part to a renewed ‘debasement trade’ as investors seek hedges against currency weakness.