Less than 15% Bitcoin Left on Crypto Exchanges Signals ‘Supply Problem’

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Bitcoin’s scarcity is intensifying as the percentage of supply held on cryptocurrency exchanges has dropped below 15% for the first time since 2018. This milestone, confirmed by on-chain analytics platform Glassnode, highlights a growing trend of long-term accumulation and diminishing liquid supply—conditions historically linked to major price rallies. With institutional demand surging and over-the-counter (OTC) balances at record lows, market dynamics are aligning for what many analysts describe as a potential "supply shock."

👉 Discover how shrinking Bitcoin supply could fuel the next major price surge.

Bitcoin Supply on Exchanges Hits Seven-Year Low

The proportion of Bitcoin held on exchanges has now fallen to just 14.5%, the lowest level in nearly seven years. This metric, known as percent supply on exchanges, is a critical indicator of market sentiment and liquidity. When Bitcoin moves off exchanges, it typically goes into cold storage or self-custody wallets—signs of long-term holding rather than active trading.

This withdrawal trend reflects rising investor confidence. Traders and institutions are increasingly choosing to hold BTC rather than keep it exposed to volatile exchange environments. As more coins are removed from circulation, the available supply for immediate trading shrinks, reducing sell pressure and increasing the potential for upward price momentum.

Historically, such supply contractions have preceded significant bull runs. For example, similar lows were observed in 2018 and 2020—both periods that led to explosive price growth in the following months. Today’s environment mirrors those conditions, with one key difference: the emergence of spot Bitcoin ETFs amplifying institutional buying power.

OTC Desks Face Historic Supply Crunch

Beyond public exchanges, the tightening supply is also evident in over-the-counter (OTC) markets, where large-volume trades occur privately. These desks rely on maintaining sufficient BTC reserves to match institutional buyers and sellers efficiently. However, recent data from Glassnode and CryptoQuant reveals that OTC balances are now at all-time lows.

Since January, BTC holdings in known OTC addresses have dropped by 21%, now sitting at just 155,472 BTC—the lowest level ever recorded. This decline is particularly notable because it tracks inflows from mining pools and excludes centralized exchange wallets, offering a clearer picture of true off-market accumulation.

“We have never seen such a divergence between balance and price! You are witnessing a supply problem play out.”
— Crypto Chiefs, X (formerly Twitter)

This growing scarcity means even modest increases in demand can trigger sharp price movements. With fewer coins available for bulk transactions, large buyers may need to enter the open market, further driving up prices through competitive bidding.

Institutional Demand Fuels the Supply Squeeze

The current market dynamics are being accelerated by strong institutional demand, particularly through spot Bitcoin ETFs. These financial products allow traditional investors to gain exposure to Bitcoin without directly managing private keys, making them highly attractive to pension funds, hedge funds, and asset managers.

According to SoSoValue, spot Bitcoin ETFs have seen 15 consecutive days of net inflows, totaling over **$4.7 billion** since June 9. On June 10 alone, inflows exceeded $102 million, underscoring sustained appetite. This consistent capital injection is pulling BTC off exchanges and into secure custodial vaults, further tightening supply.

👉 See how institutional inflows are reshaping Bitcoin’s market structure.

This structural shift is not just about volume—it’s about holding behavior. Unlike retail traders who may buy and sell frequently, institutions tend to adopt a long-term perspective. Their participation signals confidence in Bitcoin’s store-of-value narrative and reduces circulating supply even more effectively than individual "HODLers."

Why $100,000 Is the Critical Support Level

Bitcoin’s ability to hold above $100,000 has become a key psychological and technical benchmark. Despite short-term volatility—including a 2.85% dip over two days—the price has remained resilient above this level since May 28. Market analysts attribute this strength to the confluence of shrinking supply and robust demand.

Lau, founder of Focusw3b Agency, noted on X that Bitcoin’s stability is backed by “strong institutional demand” and a rapidly “shrinking” available supply. Maintaining this support level is crucial: a break below $100,000 could trigger widespread liquidations.

Data from CoinGlass shows that a drop below this threshold would likely liquidate over $6.42 billion in leveraged long positions across global exchanges. Such an event could create short-term downward pressure, though many experts believe the odds of this scenario are fading.

Bullish Outlook for Bitcoin in 2025

Despite near-term fluctuations, sentiment among analysts remains overwhelmingly positive. Many now view a fall below $100,000 as increasingly unlikely, with growing consensus around higher price targets for 2025.

Projections range from $140,000** to **over $200,000, driven by multiple factors:

These tailwinds suggest that even if volatility persists, the underlying fundamentals support sustained upward momentum.

👉 Explore what’s driving Bitcoin’s long-term price trajectory beyond 2025.

Frequently Asked Questions (FAQ)

Q: What does ‘percent supply on exchanges’ mean?
A: It measures the portion of total Bitcoin held on cryptocurrency exchanges. A lower percentage indicates more coins are being held long-term, reducing market liquidity and increasing scarcity.

Q: Why are OTC balances important?
A: OTC desks handle large trades without affecting public markets. Low balances mean fewer coins are available for big transactions, which can amplify price swings when demand rises.

Q: How do spot Bitcoin ETFs affect supply?
A: ETFs buy and hold large amounts of BTC on behalf of investors, removing those coins from circulation and reducing available supply on exchanges.

Q: What happens if Bitcoin drops below $100,000?
A: A breach could trigger mass liquidations of leveraged positions—estimated at over $6.42 billion—leading to short-term volatility. However, many analysts think institutional support makes this outcome less likely.

Q: Is low exchange supply bullish for Bitcoin?
A: Yes. Historically, declining exchange balances correlate with bull markets, as reduced sell pressure and increased holding confidence create favorable conditions for price growth.

Q: Can Bitcoin really reach $200,000?
A: While no prediction is guaranteed, growing institutional adoption, ETF demand, and supply scarcity make such levels plausible within a strong macroeconomic or geopolitical catalyst scenario.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.