Bitcoin exchange balances fall as long-term holders help drive price to $98,000

Bitcoin balances on crypto exchanges have hit historic lows as on-chain data indicates rapid depletion of available inventory.

A recent note from 10X Research on Sunday highlighted the trend, which was highlighted by a sharp decline in the amount of Bitcoin available to purchase.

According to the report, this is in stark contrast to the trends observed in late summer, when a sudden inflow temporarily replenished foreign exchange reserves.

This time, however, no such inventory restocking occurred, exacerbating the supply shortage.

According to analysts, Bitcoin and the broader crypto market have been strengthened by favorable catalysts that point to continued growth in the coming year.

President-elect Donald Trump has vowed to establish a Bitcoin reserve in the US while protecting crypto mining interests and developing favorable industrial policies.

This has helped Bitcoin’s price reach record highs of just under $100,000 and boosted the asset’s image as a store of value in the eyes of investors.

On-chain analysis suggests that long-term holders – often seen as a stabilizing force in the market – are holding on to their positions, limiting the inflow of Bitcoin into exchanges and reducing liquidity.

The attached chart from 10X Research, using Glassnode data, shows a clear divergence between the available Bitcoin supply on exchanges and its price.

The blue line, which represents the 30-day moving average of Bitcoin available for purchase, has crashed.

Meanwhile, Bitcoin price, shown on a logarithmic scale, rose sharply in the second half of 2024 and recently approached the $100,000 threshold.

Currently, only three major exchanges – Bitfinex, Binance and Coinbase – report sufficient Bitcoin reserves to meet buyer demand, 10X notes.

Smaller exchanges face increasing challenges in maintaining liquidity, which could lead to increased price volatility.

Tighter supply coincides with broader macroeconomic trends, including institutional interest in Bitcoin-driven financial products such as spot ETFs.

Shrinking stock exchange inventory could further increase pricing pressure as demand from both retail and institutional players increases. Decipher was said before.