Bitcoin Exchange Reserves Hit Record Low

Bitcoin exchange reserves have reached their lowest levels ever recorded by CryptoQuant data dating back to October 2021.

According to the data, over 51,000 bitcoin have been withdrawn from major cryptocurrency exchanges within the past month. This trend reduces the liquid supply of bitcoin and suggests that investors are withdrawing their coins as part of a long-term holding strategy.

This outflow of bitcoin from exchanges to cold storage has been a trend for multiple years, possibly driven by the rise in the digital asset's price, factors such as the approval of spot bitcoin ETFs, and anticipation surrounding the bitcoin halving event.

In October 2021, bitcoin exchange reserves hovered around 3.2 million, indicating a decrease of approximately 590,000 coins since CryptoQuant started recording this metric.

Declines Due to Specific Factors
“Bitcoin exchange reserves have declined this year because of** Mt. Gox distribution** to creditors. Our total exchange reserve data included Mt. Gox reserves, and Coinbase exchange reserve declining, which removes potential sell pressure on bitcoin from these coins,” CryptoQuant Head of Research Julio Moreno told The Block.

Moreno noted that CryptoQuant data indicates declining Coinbase bitcoin reserves are primarily being shifted to custody in specific wallets—likely by institutional players—rather than staying on the exchange. “In the case of Coinbase, bitcoin going into custody signals growing demand from institutional players, including companies and spot ETFs,” he added.

However, Moreno also stated that if Mt. Gox and Coinbase reserves are excluded, overall exchange reserve levels for 2024 appear relatively flat, suggesting that the current decline is largely focused on these two sources.

Increased Buying Pressure from New Bitcoin Whales

The decrease in exchange reserves coincides with a surge in bitcoin accumulation by new institutional players.

CryptoQuant data shows that new institutional wallets—excluding miners and exchanges—have increased their bitcoin accumulation in the past 30 days. “The buying pressure from this new accumulation is unprecedented. New whales are driving bitcoin prices higher as they buy more. Currently, these whales hold 1.97 million bitcoin. It’s worth mentioning that this isn't solely from the spot bitcoin ETFs; there are other whales involved,” stated CryptoQuant community analyst J.A. Maartunn to The Block.

Analysis reflects this accumulation on order books with “intense buying pressure on Coinbase and Bitfinex, while Binance and Bybit remain predominantly short.” This indicates that larger investors are steadily accumulating coins while smaller investors reduce their positions. CryptoQuant analysts believe this trend can exhaust retail selling force, possibly causing them to scramble to repurchase bitcoin at higher prices when market sentiment shifts positively.

New bitcoin whales have increased their accumulation significantly.

Position Building by Institutional Players
“On the other hand, institutional players have been building their positions before this sentiment improvement, causing them to distribute in upcoming price increases,” noted CryptoQuant analysts.

CryptoQuant defines new whales as wallets holding over 1,000 bitcoin with an average coin age of under 155 days that are neither centralized exchanges nor miners.

Bitcoin’s price traded flat over the past 24 hours, sitting at approximately $67,200 as of 7:12 a.m. ET, according to The Block’s Bitcoin Price Page.