Bitcoin (BTC) Exchange Balances Fall to 8-Year Lows, Signaling Tightening Supply and Renewed Institutional Interest

Bitcoin (BTC) exchange balances have fallen to their lowest levels in eight years, as blockchain data indicates tightening supply and renewed institutional interest.

NAIROBI (CoinChapter.com) – Bitcoin (BTC) exchange balances fell to their lowest in eight years as blockchain data showed tightening supply and renewed institutional interest. The move fueled debate on how high the coin can rise in the current cycle.

As of March 27, Bitcoin’s supply on exchanges dropped to just 7.53%, reaching levels last seen in 2018, according to Santiment. The firm called the trend a “positive development,” adding that it usually reflects reduced short-term selling pressure.

“The continued trend of coins moving into self-custody limits the chances of major sell-offs,” Santiment wrote on X.

The lowest reading in 8 years. As of yesterday, Bitcoin exchange balances fell to just 7.53%. This ties in closely with the high levels of coins being moved into self-custody, something we've been tracking closely and is a positive development. It lessens the chances of major sell-offs.

— Santiment (@santiment) March 27, 2024

Bitcoin whales have been aggressively accumulating the coin since March 11, adding over 129,000 BTC, which at current prices amounts to $11.2 billion. According to Glassnode, the rate of accumulation was the fastest since August 2024.

The uptick follows dovish comments from the Federal Reserve and eased concerns around new tariffs under President Trump’s administration, expected to begin on April 2.

Whale addresses holding over 10,000 BTC began offsetting the steady selling pressure from retail traders. Meanwhile, consistent inflows into spot Bitcoin exchange-traded funds (ETFs) supported the ongoing recovery.

Since March 14, Bitcoin ETFs have seen net inflows every trading day, pushing BTC more than 10%. In comparison, from February 10 to March 13, ETF flows stalled and Bitcoin dropped 17%.

The data shows a direct link between institutional demand and BTC price direction.

Bitcoin STH-MVRV ratio fell below yearly average as exchange balances hit 8-year low (yellow). Source: Aksel Kibar

Earlier cycles saw drops of 50–80% during bear markets, but today, even a 30% decline sparks similar concerns.

The Short-Term Holder Market Value to Realized Value (STH-MVRV) ratio—a key on-chain metric—fell below its 365-day average on February 25. The move suggested bearish sentiment ahead of visible price drops.

While the metric remains below trend, analysts expect it to recover as exchange balances fall. Lower BTC availability for sale usually leads to relief rallies as supply tightens.

As of press time, Bitcoin is trading at $87,653—still down 19% from its all-time high of $108,786. But bulls appear to be regaining momentum.

Bitcoin price hovers above crucial support as Aksel Kibar warns against yearly average breach. Source: Aksel Kibar on X

Despite Accumulation, Prediction Markets Remain Cautious

However, sentiment on prediction markets remains conservative. On-chain data shared by Ashwin on March 27 shows Polymarket participants expect Bitcoin to peak at $138,617 in 2025.

The data suggests a potential upside of 60% from current levels, but also highlights downside bets as low as $59,000. Polymarket users see the $138K target as a more realistic ceiling compared to extreme bullish forecasts.

Kalshi users have a similar outlook, setting their BTC price target at $122,000—just $11,500 above the current all-time high.

“This Polymarket data gives a realistic sentiment gauge, not just a bullish hope narrative,” said Ashwin.

The analysis compares market sentiment scores with both bearish and bullish price targets.

A visualization of Polymarket and Kalshi users' predictions for Bitcoin in 2025. Both platforms highlight a potential peak around $138K. Source: Ashwin on X

With the yearly average sitting at $76,000, trader Aksel Kibar stressed that this level must hold.

“Extremely important for the price not to breach the year-long average,” Kibar warned.

Key support lines lie at $69,000 and $73,800. Maintaining these levels could confirm that Bitcoin has exited its mini bear market and entered a consolidation phase.

Meanwhile, the “Bitcoin 1Y+ HOLD wave,” tracked by Bitbo Charts, continues trending up. This reflects a broader shift toward long-term holding among investors, adding to the bullish case.