Bitcoin is holding above $90,000 as the market anticipates a key Federal Reserve meeting, which could set the tone for risk assets. However, while price swings keep traders nervous, on-chain data reveals a surprisingly different story beneath the surface.
According to a new CryptoQuant report, Bitcoin reserves on centralized exchanges have continued to fall sharply in 2025, even as the price corrected toward $90,000. The total amount of BTC held on exchanges has dropped to 2.76 million, one of the lowest levels on record.
What makes this trend notable is its timing: during the steep sell-off in November and December, exchange balances didn’t rise—they fell even faster. This suggests investors are not moving coins to exchanges to sell during downturns. Instead, they are withdrawing Bitcoin into long-term storage, indicating confidence rather than panic.
As volatility builds ahead of the Fed’s decision, the contrast between short-term price anxiety and long-term accumulation is becoming a key dynamic in the Bitcoin market.
Shrinking Exchange Reserves Point to Underlying Strength
The report notes that rapidly declining exchange reserves have important structural implications. With fewer coins available on exchanges, the liquid supply tightens, reducing immediate selling pressure.
Data suggests this trend is driven not by short-term traders, but by long-term holders and institutions moving Bitcoin into self-custody. Historically, sharp price drops lead to increased exchange inflows as investors prepare to sell. This cycle, however, tells a different story—even as Bitcoin corrected toward $90,000, exchange balances kept falling, signaling accumulation by long-term buyers.
This divergence between price action and on-chain behavior hints at underlying market strength. While short-term volatility may continue, especially around events like the Fed meeting, the broader structure suggests a gradual tightening of available supply. As reserves approach historic lows, the potential for a future supply shock grows.
Despite weak spot price action, on-chain metrics are slowly turning more positive, suggesting the foundation for the next major trend may be forming below the surface.
Bitcoin Tests Key Support as Market Seeks Direction
On the 3-day chart, Bitcoin is attempting to stabilize after a sharp correction. It is currently trading around $90,437, just above the 200-day moving average—a level that has historically acted as major support during mid-cycle pullbacks.
The recent bounce from the $87,000–$88,000 zone suggests buyers are defending this area. However, the structure remains fragile as long as the price stays below the declining 50-day and 100-day moving averages.
The chart shows a clear shift in momentum. After months of steady gains, Bitcoin broke its upward structure in late November, leading to a rapid decline toward the high-$80,000 range. Selling volume increased during the drop, indicating strong participation on the downside. More recently, however, selling volume has diminished, hinting at exhaustion among short-term sellers.For a meaningful recovery, Bitcoin needs to reclaim the $95,000 to $97,000 range, where former support has now become resistance. If it fails to break through this zone, the market will likely remain in a consolidation phase, with the risk of another test of the 200-day moving average.
Frequently Asked Questions
FAQs Bitcoin Exchange Reserves Potential Price Surge
Beginner Questions
What are Bitcoin exchange reserves
Exchange reserves are the total amount of Bitcoin held on centralized cryptocurrency exchanges in wallets controlled by the exchange
Why does it matter that reserves are at their lowest point ever
Lower reserves on exchanges generally mean fewer Bitcoins are readily available for people to sell quickly This can reduce selling pressure and if demand stays high or increases can contribute to a price increase
What does selling pressure mean
Its the potential for the price to drop because a large number of people are looking to sell their Bitcoin When coins leave exchanges it suggests holders are moving them to private wallets for longterm storage not for immediate sale
How could low reserves lead to a price surge
The basic idea is supply and demand If demand to buy Bitcoin remains steady or grows but the immediate supply available for sale on exchanges is shrinking buyers may have to bid higher prices to get the Bitcoin they want
Is a price surge guaranteed because of this
No its not guaranteed While its a strong bullish signal the market is influenced by many factors like regulations macroeconomic news and overall investor sentiment It indicates a potential surge not a certainty
Intermediate Advanced Questions
Whats the difference between exchange reserves and total Bitcoin supply
Total supply is all 21 million Bitcoin that will ever exist Exchange reserves are only the fraction of that total currently held on exchange platformsrecently hitting multiyear lows around 23 million BTC
Are traders really overlooking this signal Why would they
Some might be as mainstream news often focuses on shortterm price moves or regulatory headlines This is an onchain metric that requires looking beyond daily price charts Traders focused on hype or shortterm technical analysis might miss these fundamental supply shifts
Couldnt low reserves just mean people are moving to other exchanges
This metric typically looks at aggregate reserves across all major exchanges A collective drop to multiyear lows strongly suggests coins are leaving the exchange ecosystem entirely not just rotating between platforms
What are the common problems or risks with interpreting this data
1