Bitcoin Exchange Reserves Drop to 2.5 Million BTC
Bitcoin (BTC) exchange reserves have reached their lowest level in three years, signalling a potential supply shock as institutional demand continues to rise. According to data from CryptoQuant, the total Bitcoin reserves across all cryptocurrency exchanges have declined to just 2.5 million BTC.
The reduction in available supply on exchanges suggests that long-term holders and institutional investors are accumulating Bitcoin, reducing liquidity and increasing the likelihood of a price rally. This phenomenon, commonly known as a ‘supply shock,’ occurs when strong buyer demand meets a shrinking available supply, often leading to upward price movements.
Bitcoin Holds Firm Above $95,000 Amid Market Pressures
Despite global economic concerns, Bitcoin has shown resilience, maintaining its position above the critical $95,000 level. In the last 24 hours, BTC saw a modest 0.4% increase, trading above $97,000 at the time of writing. This comes amid heightened investor concerns over a potential trade war following new import tariffs imposed by the United States and China.
Analysts believe Bitcoin’s ability to sustain its value above this psychological level highlights strong institutional interest. Ryan Lee, chief analyst at Bitget Research, stated that ‘seller exhaustion’ could indicate a shift from selling pressure to buying momentum, reinforcing Bitcoin’s stability in the market.
Institutional Demand and ETF Inflows Shape Market Dynamics
The increasing involvement of institutional investors, particularly through exchange-traded funds (ETFs), has played a crucial role in Bitcoin’s recent performance. However, stagnating ETF inflows have put some pressure on its price trajectory. Data from Farside Investors reveals that US spot Bitcoin ETFs experienced net negative outflows of over $186 million on 10 February, erasing the previous day’s net positive inflows of $171 million.
Despite these fluctuations, market analysts remain optimistic about Bitcoin’s long-term prospects. If institutional demand continues to grow while supply on exchanges remains limited, the potential for a significant price appreciation remains strong.
Key Support Level at $95,000 Crucial for Market Stability
Maintaining the $95,000 psychological support level will be essential for Bitcoin’s continued momentum. A drop below this threshold could trigger significant downside volatility, with data from CoinGlass indicating that a correction below $95,000 could result in the liquidation of over $1.52 billion worth of cumulative leveraged long positions across all exchanges.
While short-term concerns exist regarding a potential dip below $90,000, the broader outlook for Bitcoin in 2025 remains positive. Analysts project that Bitcoin’s price could reach between $160,000 and $180,000 by the end of the year, driven by growing institutional adoption and decreasing supply on exchanges.
As the market navigates global economic uncertainties and fluctuating investor sentiment, Bitcoin’s ability to sustain key support levels and withstand selling pressure will be critical in shaping its long-term trajectory.
