Bitcoin News Today: Bitcoin's 6-Year Low Exchange Reserves Signal Investor Shift to Long-Term Holding

Bitcoin's centralized exchange reserves have plummeted to a six-year low of approximately 2.4 million BTC, according to data from CryptoQuant and Glassnode, signaling a shift in investor behavior toward long-term accumulation. This decline, which reflects reduced on-exchange liquidity, has been accompanied by a surge in institutional and retail holders transferring Bitcoin to private wallets and cold storage. The drop in exchange balances has intensified bullish sentiment, with analysts noting that historically, such phases of tightening supply often precede significant price rallies.

The reduction in exchange reserves is part of a broader trend of declining inflows into centralized platforms. Exchange inflows have fallen from an average of 0.55 to 0.48 BTC as the price climbed from $108,000 to $124,000, according to CryptoQuant. This suggests that selling pressure is diminishing, with investors opting to hold rather than trade. Bloomberg's Eric Balchunas and Nate Geraci highlighted that spot Bitcoin ETFs recorded $3.3 billion in inflows last week, marking one of the strongest weeks since their inception. Institutional inflows alone exceeded $10 billion in a month, underscoring growing confidence in Bitcoin's supply-constrained narrative.

On-chain metrics further reinforce the bullish case. The MVRV Z-Score, which measures the ratio of market value to realized value, has risen above 2.6, indicating that a significant portion of Bitcoin holders are sitting on substantial unrealized gains. Santiment analysts noted that while this level of profitability reflects mid-cycle enthusiasm, it also raises the risk of profit-taking, which could trigger short-term volatility. Meanwhile, the NVT Ratio (network value to transaction volume) has spiked, suggesting that Bitcoin's valuation may be outpacing fundamental usage. However, this could also reflect a shift toward long-term holding rather than active trading.

Derivatives markets have also seen a surge in bullish positioning. Funding rates on major exchanges remain positive, confirming sustained long bias in futures and options markets. Traders continue to add leverage, though analysts caution that elevated leverage increases the risk of liquidations during sudden downturns. Santiment highlighted that a potential "shakeout" of over-leveraged positions could reset market dynamics, paving the way for healthier price discovery.

Bitcoin's price action has aligned with these on-chain and institutional trends. The asset broke above a falling channel on October 1, reclaiming the $120,000 support zone and reaching an all-time high of $125,559 on October 5. Technical indicators, including the MACD bullish crossover, suggest continued upward momentum. If Bitcoin maintains its structure above $120,000, analysts project a potential move toward $150,000 by year-end, driven by tightening supply and sustained institutional demand.

The confluence of low exchange reserves, rising ETF inflows, and strong on-chain metrics has sparked optimism among market participants. However, experts caution that while the long-term outlook remains constructive, short-term volatility is likely as extended metrics and high leverage create potential imbalances. The coming weeks will be critical in determining whether Bitcoin consolidates its gains or faces a correction before resuming its upward trajectory.