Bitcoin Exchange Supply Drops 40,000 BTC, Price Hits $95,400

Bitcoin's exchange supply has reached its lowest level in seven years, dropping to 2.488 million BTC on Friday. This decline indicates a significant shift in market dynamics, as traders and investors appear to be holding onto their Bitcoin rather than selling it on exchanges. The current exchange reserves stand at 2.492 million BTC, which is an increase of around 40,000 BTC over the weekend. However, this level remains the lowest since October 2018, according to CryptoQuant data.

This exodus of Bitcoin from exchanges coincides with the coin's price sitting at $95,400, with the potential for further gains following the Trump administration's willingness to reach a deal on tariffs with China. The combination of declining exchange balances and increasing fund inflows suggests a renewed phase of accumulation. Bitcoin funds witnessed $3.2 billion in inflows in the week to April 28, marking a significant turnaround from several consecutive weeks of negative flows. Last week’s report showed a month-to-date outflow of $894 million.

The exchange whale ratio, which measures the top 10 exchange inflows compared to total inflows, has fallen from 0.512 on April 17 to 0.36 on April 27. This indicates that retail traders are playing a bigger role in the current wave of trading, suggesting more organic demand for Bitcoin. Various factors contribute to this demand, including Bitcoin's decoupling from tech stocks and its closer correlation with gold in recent weeks.

However, Bitcoin's actual correlation with gold has been volatile, ranging from 0.74 at the end of January to -0.87 in early February, and fluctuating significantly throughout the year. It is premature to conclude that Bitcoin is genuinely behaving like digital gold, despite its recent performance amid economic uncertainty. The Bitcoin dominance index, which is the ratio of BTC’s market cap to the capitalization of the entire crypto market, has risen from 54% in early December to 63.4% today. This reflects traders moving from very volatile altcoins to the less volatile BTC.

The Bitcoin volatility index has generally been fluctuating within a narrower band over the past couple of years, with fewer large spikes compared to prior years. However, there has been no particular reduction in its volatility in the past few weeks, with April 7 yielding the index’s second-highest reading of 2025, when it rose from 3.4 to 6.71 as the coin plunged to a five-month low of $74,773. This volatility highlights the ongoing uncertainty and potential for significant price movements in the Bitcoin market.