Coins are leaving crypto exchanges at a pace not seen in years, and the market is starting to reflect it. On-chain data from Santiment shows that $BTC supply sitting on centralized exchanges
Coins are leaving crypto exchanges at a pace not seen in years, and the market is starting to reflect it. On-chain data from Santiment shows that $BTC supply sitting on centralized exchanges has fallen to roughly 5.6% of total circulating supply, the lowest ratio of Bitcoin on exchanges since 2018.$ETH tells a similar story. Ethereum exchange supply is also still near the lowest levels seen since ETH began public trading in 2015.
Cryptocurrencies held on exchanges are generally more accessible for immediate trading or selling, so lower exchange balances can indicate stronger long-term holding behavior among investors. In plain terms, fewer coins sitting on exchanges means there is less readily available sell-side supply. Falling exchange reserves typically point to investors moving coins into self-custody, a pattern often read as reduced near-term sell pressure.
That dynamic has a direct effect on price mechanics. When available supply thins out and demand holds steady or rises, even modest buying interest can produce outsized price moves. Analysts sometimes refer to this as a short squeeze setup: without a deep pool of coins ready to be sold, any surge in buying activity can push prices sharply higher with limited resistance.
One caveat worth noting: exchange reserves no longer capture the full market picture, since spot ETFs and off-chain custody have absorbed a growing share of supply over the past two years. The signal remains useful, but it should be read alongside other metrics rather than in isolation.
The supply backdrop has coincided with a notable price recovery for both assets. BTC has gained roughly 6% over the past seven days, recovering from lows in the high $50,000s.Ethereum briefly topped $1,800 before pulling back, with the leading altcoin up more than 12% over the past seven days. Both assets had been trading near multi-year relative lows heading into the move.
The broader macro picture has also provided a tailwind. Analysts attribute much of the recent rally to US jobs data, with the Bureau of Labor Statistics reporting just 57,000 new jobs in June, nearly half the 113,000 forecast.Investors read the data as a signal for potential monetary easing, triggering a wave of short covering, with about $450 million in crypto shorts liquidated over 24 hours according to Coinglass.
Whether the bounce holds will depend on whether exchange supply stays low and whether institutional flows, particularly through spot Bitcoin ETFs, turn sustainably positive. For now, the on-chain structure favors the bulls.
Sources:Santiment: Bitcoin and Ethereum Exchange Supplies Still Near Bottom of the BarrelCoinDesk: Bitcoin Pulls Back After Run Above $64,000Bitcoin Foundation: BTC Price Jumps to $62K on July 3
