Bitcoin exchange reserves have hit a three-year nadir, signaling an impending supply shock due to escalating demand from institutional buyers, notably exchange-traded funds (ETFs). The total reserves across all cryptocurrency exchanges have diminished to a mere 2.5 million BTC, the lowest it’s been since 2022, according to data from CryptoQuant.
This plummeting supply of Bitcoin on exchanges forebode an oncoming sales rush, driven by a “supply shock.” This is a scenario where rising demand for Bitcoin collides with a shrinking availability, culminating in a rise in bitcoin prices.
In the past day, Bitcoin has observed a 0.4% rise, trading at over $97,000 even amidst anxieties over a global trade war on the back of new import tariffs introduced by the US and China. Despite experiencing its most significant daily sell-off since the devastating downfall of Three Arrows Capital in June 2022, Bitcoin’s price continued to maintain above the crucial $95,000 support level.
Ryan Lee, chief analyst at Bitget Research, attributes this resilient performance to “strong institutional interest” and a phenomenon termed as “seller exhaustion,” which could signify a potential market transition from selling pressure to buying pressure. Lee notes that factors such as global economic stability, advancements in technology, and psychological support levels also have significant roles in Bitcoin’s price stability.
However, he adds a cautionary note that stagnating Bitcoin ETF inflows might continue to put downward pressure on Bitcoin’s price trajectory. On February 10, US Spot Bitcoin ETFs saw a net negative outflow of over $186 million, nullifying the previous day’s net positive inflows of $171 million.
The $95,000 support level remains pivotal for Bitcoin to avoid severe downward price volatility. A correction below this threshold could liquidate over $1.52 billion in leveraged long positions across all exchanges. Nevertheless, despite potential short-term price drop risks below $90,000, Bitcoin’s price trajectory remains upbeat for the remainder of 2025, with predictions ranging from $160,000 to over $180,000.