The amount of Bitcoin held on cryptocurrency exchanges has reached a new yearly low, sparking discussions among analysts that this trend could serve as a catalyst for Bitcoin’s price to successfully retest the $60,000 level. As demand grows, the reduced selling pressure might pave the way for a bull market.
According to an Aug. 29 analysis by CryptoQuant contributor Gaah, Bitcoin reserves on exchanges have decreased by approximately 12.9% since the beginning of the year. This decline leaves a total of 2.62 million Bitcoin across all major exchanges. The analyst highlighted that this shift in Bitcoin from exchanges to cold wallets suggests that investors are increasingly committed to holding the asset for the long term, reflecting optimism about its future price potential.
The year-to-date high for Bitcoin supply on exchanges was just over 3.05 million Bitcoin. Source: CryptoQuant
The dwindling supply of Bitcoin on exchanges aligns with recent market predictions that Bitcoin’s price could rally in the fourth quarter of 2024. Gaah further noted that the increase in long-term holders could lead to a more resilient market, less susceptible to panic selling. When there is less Bitcoin available for immediate sale on exchanges, liquidity decreases, which can bolster prices if demand remains strong.
Pseudonymous crypto trader MartyParty pointed to the “ultra-low” Bitcoin reserves, indicating that “something is happening.” Similarly, the crypto commentator Bitcoin for Freedom shared with their 74,800 X (formerly Twitter) followers that the recent removal of 56,000 Bitcoins from exchanges in just one week could create a supply shock, driving prices upward.
Bitcoin is down 0.30% over the past 24 hours. Source: CoinMarketCap
At the time of writing, Bitcoin is trading at $58,970, having briefly retested the $60,000 mark earlier in the day, according to CoinMarketCap data. Long-term Bitcoin holders have reportedly invested over $10 billion in the asset and have significantly reduced selling activity since the price declined from its peak of $69,000.
