Bitcoin Exchange Balances Hit Six-Year Low Amid Shortage

The balance of Bitcoin held on centralized exchanges has recently dropped to a six-year low. This decrease coincides with Bitcoin reaching a new all-time high price tier. On Sunday morning, Bitcoin exceeded $125,700 on Coinbase, as reported by Tradingview. This peak surpassed its previous maximum of $124,500 recorded on August 14.

Bitcoin’s Price Surge and Market Dynamics

Although Bitcoin experienced a pullback of 13.5% by September 1, it has seen a robust recovery as October began. Market analysts are watching closely. Nate Geraci, President of Nova Dius, commented on the surge, stating that many individuals remain unaware of Bitcoin’s potential. Meanwhile, analyst Rekt Capital suggested that if Bitcoin can convincingly break the $126,500 ceiling, the price could rise rapidly.

Exchange Balances at an All-Time Low

The total Bitcoin balance on centralized exchanges fell to a remarkable low of 2.83 million BTC, according to data from Glassnode. This level has not been seen since early June 2019 when Bitcoin traded at around $8,000 during a bear market. In contrast, CryptoQuant reported a slightly lower balance of 2.45 million BTC, marking a seven-year low.

Over the past two weeks, more than 114,000 BTC, valued at over $14 billion, has been withdrawn from exchanges, as noted by Glassnode. The trend of Bitcoin leaving centralized exchanges suggests that holders are increasingly opting for self-custody or institutional storage, indicating a long-term holding strategy rather than immediate selling.

Implications of Decreased Exchange Balances

A declining Bitcoin balance on exchanges suggests a tightening market. Matthew Sigel, head of digital assets research at VanEck, highlighted reports of exchanges having limited Bitcoin reserves. He speculated that a supply shortage could potentially occur, urging cautious investors to act swiftly.

• Bitcoin reached a new all-time high of $125,700 on October 1.
• Bitcoin balance on centralized exchanges is at 2.83 million BTC, a six-year low.
• 114,000 BTC worth over $14 billion left exchanges in the past two weeks.

Mike Alfred, a trader, mentioned that major over-the-counter (OTC) desks may exhaust their Bitcoin supply quickly unless prices rise to between $126,000 and $129,000. As the market evolves, Bitcoin’s trajectory appears to be particularly volatile.