Bitcoin Supply on Exchanges Drops 5% as Institutions Accumulate

The supply of Bitcoin on exchanges has decreased to below 2.9 million, marking a significant trend that has been accelerating since April. Over 150,000 BTC have left exchanges and moved to cold storage during this period. The last time exchange balances were this low, Bitcoin experienced a substantial rally, gaining more than 230% in the following years.

Traders often interpret a decline in exchange balances as a bullish signal, suggesting strong conviction and reduced near-term sell pressure. If demand increases while supply remains constrained, it could trigger a sharp price movement, a scenario known as a supply shock.

Institutions and ETFs are driving this exodus. In just three months, corporate buyers and treasury firms have withdrawn over 100,000 BTC from exchanges. Michael Saylor’s company is reportedly preparing another major acquisition, joining other entities like ProCap Financial and GameStop in this accumulation trend.

Bitcoin ETFs are also attracting significant inflows, with over 800,000 BTC now held in ETF custody wallets, further contributing to the supply drain.

Despite these bullish indicators, not all market participants share the same optimism. Financial author Robert Kiyosaki has warned of a possible Bitcoin price collapse in July, highlighting the divided market sentiment.

As Bitcoin hovers near key levels, the focus is now on whether this shrinking supply will ignite the next rally or if an unexpected correction is on the horizon.