The supply of Bitcoin on exchanges has fallen to its lowest level in 8 years, igniting optimism for a potential recovery in prices aiming for a new all-time high for BTC.
As reported in a post on X by blockchain analytics company Santiment on March 27, the Bitcoin (BTC) supply residing on exchanges has decreased to 7.53%, marking the lowest point since 2018. This trend indicates that an increasing number of investors are transferring their Bitcoin into self-custody, thereby reducing the quantity readily available for immediate selling.
A decrease in exchange supply is often seen as a bullish indicator, as it suggests reduced short-term selling pressure and a growing confidence among holders.
💸 Bitcoin's ratio of supply on exchanges has officially dropped to as low as 7.53%, the lowest since February 20, 2018. The 7-year milestone reflects a continued trend of investors of crypto's top asset feeling comfortable 'hodling' for the long-term, regardless of short-term… pic.twitter.com/m7d6Yon5HR
— Santiment (@santimentfeed) March 26, 2025
Institutional demand has been a significant driver behind Bitcoin’s price fluctuations. Bitcoin exchange-traded funds have experienced consistent inflows since March 14, contributing to a more than 10% increase in BTC’s price. In contrast, ETF inflows were either negative or stagnant between February 10 and March 13, resulting in a 17% drop in Bitcoin value.
This trend illustrates the strong correlation between institutional purchases and Bitcoin price movements, with large investors exerting a more substantial influence on the market than retail traders.
In addition to the rising institutional interest, an article published on OKX’s research page on March 25 notes that Bitcoin’s market behavior is evolving. Traditionally, a 50% drop was considered indicative of a bear market, with past cycles seeing declines of up to 80%.
However, as Bitcoin has matured, extreme downturns caused by panic selling have become increasingly rare. Nowadays, a 30% drop is often sufficient to raise bear market alarm bells. Insights from the article suggest that instead of experiencing the prolonged declines characteristic of previous cycles, Bitcoin may currently be enduring a brief “mini” bear market.
An early sign of this shift was observed in the Short-Term Holder Market Value to Realized Value ratio, which measures the current price of Bitcoin against the average price at which short-term holders acquired their coins. This metric exhibited bearish sentiment even before significant price declines were observed on February 25.
Currently, the ratio has dipped below the critical 365-day moving average, a level that typically indicates increased selling pressure. Nevertheless, analysts expect this metric to rebound and potentially spark a relief rally as the Bitcoin supply on exchanges continues to decrease. At the time of writing, Bitcoin is trading at $87,653, approximately 19% lower than its peak of $108,786.
