Bitcoin CEX Balance Hits Nearly Two-Year Low Despite Bear Market Conditions

Bitcoin custody balances on centralized exchanges have fallen to nearly two-year lows, according to recent data. This trend is notable in a bear market environment, where investors typically seek to move assets off exchanges for security reasons. The shift suggests increased bearish sentiment or strategic capital reallocation.

Meanwhile, Strategy, a major player in the Bitcoin ecosystem, is raising $44.1 billion to expand its Bitcoin holdings. The firm aims to become a dominant liquidity sink during the next market upswing. This move aligns with broader trends of corporate and sovereign interest in Bitcoin.

Bernstein analysts have noted that Strategy's balance sheet strength and capital strategy are key factors in its ability to weather the current downturn. The firm has raised $7.3 billion year-to-date in 2026 and now controls 3.6% of the total Bitcoin supply.

Why Did This Happen?

The drop in Bitcoin open interest by $19 billion over six months reflects a market in de-risking mode. Aggregated funding rates have cooled, and perpetual futures are trading at a discount to spot prices. This behavior is consistent with bear market cycles seen in 2022-2023.

Binance's monthly spot volume has also fallen to near $52 billion, the lowest since September 2023. This further supports the view that investors are avoiding leveraged positions and adopting a more defensive posture.

How Did Markets Respond?

Bitcoin holders have shifted from panic to a cash-buffer strategy amid heightened volatility. This behavior suggests a lack of strong directional conviction in the market. Investors are prioritizing liquidity and capital preservation over aggressive accumulation.

In contrast, Ethereum-based projects are attracting significant capital inflows. Pepeto's Ethereum bridge upgrade has removed gas fees and failed transfers, which has drawn attention from whale wallets. The project's presale has already raised over $8.25 million.

Bitcoin Everlight has also launched its public presale, offering APY rewards of up to 28%. The project's dual audit and KYC verification have added credibility, and its transaction routing network aims to complement Bitcoin's blockchain.

What Are Analysts Watching Next?

Analysts at Bernstein remain optimistic about Bitcoin's future. The firm has maintained a $150,000 price target for 2026 and believes that Strategy is positioned for significant upside. The firm also sees potential in Ethereum, with Standard Chartered forecasting $7,500 by year-end.

However, geopolitical uncertainty remains a key risk factor. President Donald Trump's 48-hour ultimatum to Iran triggered a sharp sell-off in Bitcoin, which dropped below $69,200. The market faced $299 million in liquidations in 24 hours, with 85% attributed to long positions.

Investors will closely watch how Bitcoin performs in the coming weeks. A sustained move above key resistance levels could signal the market's readiness for a recovery. Conversely, further declines may prolong the bearish phase as holders remain cautious.