As the crypto market rally continues, investor sentiment is growing increasingly bullish—reflected in how traders are storing their assets. According to new data from market intelligence platform Santiment, the exchange balances of both Bitcoin (BTC) and Ethereum (ETH) have dropped to multi-year lows, a development that could have significant implications for the market.
Exchange Supply Drops to Historic Lows
Santiment reports that BTC’s supply on centralized exchanges has fallen to just 7.1%, marking its lowest level since November 2018. Over the past five years, more than 1.7 million BTC have been withdrawn from trading platforms.
Ethereum is seeing an even more pronounced trend. ETH’s exchange balance now sits below 4.9%, a level not seen in over a decade, with around 15.3 million ETH pulled from exchanges during the same five-year span.
This shrinking exchange supply is typically interpreted as a bullish signal, indicating reduced immediate selling pressure. When investors move assets off exchanges—often to cold storage—it suggests growing confidence in long-term price appreciation and less intention to sell in the short term.
What Does This Mean for Market Dynamics?
A lower supply of BTC and ETH on exchanges means fewer coins are available for quick sale. If demand increases while supply tightens, this dynamic can lead to increased price volatility and upward momentum. With fewer coins readily available, even moderate buying pressure can result in sharp price movements.
Is Demand Keeping Up?
The demand side of the equation appears strong. U.S.-based spot Bitcoin ETFs have posted positive inflows in 8 of the last 10 trading days, with daily investments reaching into the hundreds of millions of dollars. Spot Ethereum ETFs have also seen notable, albeit smaller, inflows.
Backing this up, CoinShares’ latest Digital Asset Fund Flows report shows continued positive sentiment, with digital asset investment products seeing inflows for the fifth consecutive week. Both Bitcoin and Ethereum-focused funds contributed significantly to this trend.
Market Outlook
At the time of writing, Bitcoin is trading at $105,290, while Ethereum is priced at $2,527, according to CoinMarketCap. With exchange balances at multi-year lows and institutional demand on the rise, the market may be setting up for stronger price action—especially if the current trend of accumulation continues.
