Bitcoin is holding above $90,000 as the market approaches a highly anticipated Federal Open Market Committee (FOMC) meeting, a key event that could set the direction for risk assets. While price movements keep traders on edge, on-chain indicators are revealing a surprisingly different story beneath the surface.
According to a new CryptoQuant report, Bitcoin’s exchange reserves have continued to fall sharply throughout 2025, even as the price corrected toward the $90,000 range. The data shows that the total amount of BTC held on centralized exchanges has dropped to 2.76 million BTC, reaching one of the lowest levels ever recorded.
What makes this trend especially notable is its timing: during the steep sell-off in November and December, exchange balances did not increase—they fell even faster. The report highlights this behavior, showing accelerating outflows while the price was dropping. This pattern is unusual, suggesting investors are not moving coins to exchanges to sell during weakness. Instead, they continue withdrawing Bitcoin into long-term custody, pointing to confidence rather than capitulation.
As volatility builds ahead of the FOMC decision, the contrast between short-term price anxiety and long-term accumulation is becoming a key dynamic in the current Bitcoin market.
### Shrinking Exchange Reserves Signal Structural Strength
The report emphasizes that Bitcoin’s rapidly declining exchange reserves have important structural implications. When fewer coins are held on centralized exchanges, less Bitcoin is available for immediate sale, effectively tightening the liquid supply.
Data suggests this decline is not driven by short-term speculators, but by long-term holders and institutional entities steadily moving BTC into self-custody or cold storage. Historically, sharp price declines trigger inflows to exchanges as investors prepare to sell or exit positions. This cycle, however, tells a different story. Even as Bitcoin corrected toward $90,000, exchange balances kept falling, indicating that buyers with a long-term view are actively accumulating.
This divergence between price action and on-chain behavior signals underlying strength. While short-term volatility may continue—especially around macro events like the FOMC meeting—the broader structure suggests a market quietly tightening its available supply. As reserves approach historic lows, the potential for a future supply shock grows.
Despite weak spot market performance, on-chain metrics are slowly turning bullish, hinting that the foundation for the next major trend may be forming beneath the surface.
### BTC Tests Critical Support as Market Awaits Direction
Bitcoin’s price action on the 3-day chart shows a market trying to stabilize after a sharp correction. BTC is currently trading around $90,437, hovering just above the 200-day moving average—a level that has historically acted as major dynamic support during mid-cycle pullbacks.
The recent bounce from the $87,000–$88,000 range suggests buyers are defending this zone, but the structure remains fragile as long as the price stays below the downward-sloping 50-day and 100-day moving averages.
The chart shows a clear shift in momentum. After months of steady higher lows, Bitcoin broke its upward structure in late November, leading to a rapid drop toward the high-$80,000 range. Volume increased during the decline, indicating stronger selling pressure. However, recent candles show shrinking sell volume, 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 in the wallets of major cryptocurrency exchanges Its the supply readily available for users to trade or sell
Why does it matter that reserves are at their lowest point ever
When reserves drop to historic lows it means less Bitcoin is available for immediate sale on exchanges Basic economics suggests that if demand stays the same or increases while available supply shrinks upward price pressure can build
What does signaling a potential price surge mean
Its an indicator not a guarantee Historically sharp declines in exchangeheld Bitcoin have often preceded significant price increases The logic is that investors are moving coins off exchanges to hold them longterm reducing sellside pressure
Why are traders overlooking this
Many traders focus on shortterm news price charts or hype A metric like exchange reserves is a more fundamental onchain data point that can be less flashy and might not make headlines causing some to miss its significance
Intermediate Questions
How does moving Bitcoin off an exchange affect the price
When you move Bitcoin to a private wallet youre essentially taking it off the market Youre less likely to sell it impulsively If many people do this simultaneously the liquid supply on exchanges dries up making large selloffs harder and potentially allowing buys to push the price up more easily
Is a drop in reserves always bullish
Generally yes but context is key Its most bullish when the price is also consolidating or rising indicating accumulation If the price is crashing while reserves drop it could mean investors are panicselling and withdrawing cash which is bearish
Where can I check Bitcoin exchange reserve data
You can find this data on blockchain analytics websites like Glassnode CryptoQuant or CoinMetrics They track the total balance of exchange wallets publicly
Whats the difference between withdrawing to cold storage and just selling
Withdrawing to Cold Storage Moving Bitcoin to a secure offline wallet with the intent to hold it longterm This reduces exchange supply