Bitcoin (BTC) Exchange Reserves Drop to Lowest Levels in Years, Reinforcing Bullish Market Sentiment

Bitcoin reserves on centralized crypto exchanges like Binance and Coinbase have dropped to their lowest levels in years, reinforcing bullish crypto sentiment.

Bitcoin (BTC) reserves on centralized crypto exchanges have hit their lowest levels in years, indicating bullish crypto sentiment and a mass exodus of coins from exchanges.

According to data from on-chain analytics firm CryptoQuant, investors have withdrawn over 171,000 Bitcoin (BTC) from leading crypto exchanges since Donald Trump's victory in the U.S. presidential election. These large-scale withdrawals reduce the supply of coins available for sell-offs, often signaling a long-term investment strategy adopted by holders.

While the data highlights the significant Bitcoin exchange outflows after President Trump's victory, the trend extends back to 2021. Bitcoin exchange reserves have been steadily dwindling since the crypto's previous peak, indicating strong belief in BTC despite market drawdowns in 2022 and 2023.

As of October 2021, exchange holdings were noted at 3.2 million BTC. By comparison, the level had dropped to 2.46 million tokens at press time.

Cryptocurrency exchange reserves. Source: CryptoQuant

Moreover, Glassnode's analysis echoes CryptoQuant's findings, indicating an increase in short-term dormant BTC. The platform's illiquid supply metric, which tracks long-term investor holdings, showed an uptick of 185,000 Bitcoin in the past 30 days.

Around 75% of BTC's current supply, roughly 14.8 million coins, has been inactive since early November. This pattern may continue into 2025 as Trump implements crypto-friendly policies and drives up adoption.

In the wake of President Trump's re-election, the world's top cryptocurrency accelerated to a peak of $99,600 within weeks. However, Bitcoin and the broader digital asset market corrected their price ascents on Dec. 3 amid political turmoil in South Korea and profit rotation into altcoins like Ripple (XRP).

Nevertheless, experts like Fundstrat Capital CIO Thomas Lee anticipate an incoming supply shock and a rise above $100,000 before the end of 2024.