Bitcoin Exchange Balances Hit Four-Year Low Amid Rising Demand

Bitcoin (BTC) balances on exchanges have dropped to their lowest levels in nearly four years, indicating increased investor interest and demand. Meanwhile, the so-called “$100,000 sell wall” for bitcoin is proving difficult to overcome, with approximately $384 million worth of BTC listed for sale between the current price and the six-figure milestone. However, supply metrics hint at growing pressure for an upward price move.

Long-Term Holders Accumulate

“Illiquid supply” refers to bitcoin held by long-term investors (LTHs) that remains inactive in the market. Recent data from Glassnode reveals that this illiquid supply has surged by over 185,000 BTC in the past month, reaching a record 14.8 million BTC—equivalent to 75% of the circulating supply, which stands just below 20 million. (Bitcoin’s maximum supply is capped at 21 million.)

The 185,000 BTC increase marks the second-largest monthly gain this year and underscores a predominant trend among investors: holding rather than trading. CoinDesk research further supports this, showing that since November 26, LTHs have transitioned from selling to accumulating. Over 2,000 BTC have been added to their holdings during this period, suggesting that profit-taking may be tapering off, potentially reducing market selling pressure.

Bitcoin Exits Exchanges

Since the start of the current bull run in early November, bitcoin has been leaving exchanges at a rapid pace. This marks the end of a nearly two-year period where exchange balances remained relatively stable—a positive sign pointing to growing investor demand.

However, when viewed over a longer five-year period, the picture is more nuanced. Exchange balances have fluctuated within a relatively narrow range of 2.7 million to 3.3 million BTC. For the bull run to gain sustained momentum, more BTC needs to flow out of exchanges, signaling continued investor appetite rather than leveraged demand from derivatives markets.

Key Takeaway

The combination of increasing illiquid supply and declining exchange balances highlights a market dynamic favoring accumulation and long-term holding. If these trends persist, they could lay the groundwork for a more sustainable bull market and a potential break through the $100,000 resistance.