Bitcoin Exchange Balances Decline To Three-Year Low Amid Rising Prices

Picture of bitcoins pouring out of a vault

Bitcoin exchange balances have been on the decline since the bull rally began. The volumes were expected to go up once the digital asset had hit a new all-time high in October. However, this was not the case. Previous trends have often pointed to exchange balances seeing an increase in bull markets when investors moved their holdings to exchanges in order to take profits. This bull market has defied all expectations for it and continues to do so.
Outflows from exchanges outpace inflows as investors withdraw BTC from exchanges en masse. Exchange balance volumes relative to the circulating supply of bitcoin have declined towards three-year lows. BTC exchange balances now sit at levels not seen since January 2018. This has led to a supply squeeze on exchanges, causing sell pressures to drop tremendously.
Related Reading | American Singer Mariah Carey Offers Free $20 In Bitcoin To Promote Adoption
Big Exchanges See Declining Balances
Big exchanges like Binance, Coinbase, and Huobi have seen large volumes of bitcoin withdrawn from their exchanges. Binance recorded the highest outflows for the last week with 21,000 BTC withdrawn from the crypto exchange. This is one of the sharpest declines recorded in the market.

BTC exchange balances continue to decline | Source: Arcane Research
Huobi also saw thousands of BTC leave the exchange in the past week. The past seven days save 8,000 BTC withdrawn from the cryptocurrency exchange. The outflows from the exchange culminated in a 9% drop in the volume of bitcoin held on Huobi.
These outflows are no longer surprising given that the market has continuously followed this trend for the past few months. Growing scarcity has led to mounting buy pressures as investors scramble to get their hands on as much of the digital asset as they can.
Exchanges Hold 12.94% Of Bitcoin Supply
The share of the total circulating supply held by exchanges has plummeted in October. Currently, exchanges hold 2.44 million BTC on their balances. This translates to 12.94% of the total circulating supply, a new three-year low. A total of 27,500 BTC left exchanges in the past week alone.
Related Reading | Brace For Impact: Wall Street Is Headed Straight For Bitcoin, Says Analyst
Chart trends show that the volume held by these exchanges has consistently declined as the price of bitcoin has grown. Exchange balances had peaked for the year in June after the market had experienced a crash that put an end to the bull rally in April. Sell pressures eased in the months following June, leaving room for further accumulation by investors. Investors are choosing to leave their assets in cold storage rather than moving to exchanges to take gains from the market.

BTC trading in the mid-$58K | Source: BTCUSD on TradingView.com
Glassnode’s data shows that Coinbase holds 29% of global exchange reserves. Despite the sharp decline in its balances, Binance still holds 21% of global bitcoin exchange reserves. Gemini holds the third-largest volume with 12% of global reserves. The report however did not include balances from the crypto exchange, FTX.
Featured image from Bitcoin News, charts from Arcane Research and TradingView.com

bitcoin
Bitcoin (BTC) $ 66,545.83
ethereum
Ethereum (ETH) $ 3,252.13
tether
Tether (USDT) $ 0.999888
bnb
BNB (BNB) $ 607.16
solana
Solana (SOL) $ 157.31
usd-coin
USDC (USDC) $ 1.00
staked-ether
Lido Staked Ether (STETH) $ 3,251.26
xrp
XRP (XRP) $ 0.547643
dogecoin
Dogecoin (DOGE) $ 0.162027
the-open-network
Toncoin (TON) $ 5.85
cardano
Cardano (ADA) $ 0.499699
shiba-inu
Shiba Inu (SHIB) $ 0.000027
avalanche-2
Avalanche (AVAX) $ 39.04
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 66,621.85
polkadot
Polkadot (DOT) $ 7.46
bitcoin-cash
Bitcoin Cash (BCH) $ 506.01
tron
TRON (TRX) $ 0.113558
chainlink
Chainlink (LINK) $ 15.40
near
NEAR Protocol (NEAR) $ 6.93
matic-network
Polygon (MATIC) $ 0.751801
internet-computer
Internet Computer (ICP) $ 14.74
litecoin
Litecoin (LTC) $ 87.09
uniswap
Uniswap (UNI) $ 8.12
leo-token
LEO Token (LEO) $ 5.72
dai
Dai (DAI) $ 0.999819
hedera-hashgraph
Hedera (HBAR) $ 0.129058
blockstack
Stacks (STX) $ 2.90
aptos
Aptos (APT) $ 9.86
first-digital-usd
First Digital USD (FDUSD) $ 1.00
ethereum-classic
Ethereum Classic (ETC) $ 27.97
mantle
Mantle (MNT) $ 1.15
crypto-com-chain
Cronos (CRO) $ 0.132252
render-token
Render (RNDR) $ 9.14
filecoin
Filecoin (FIL) $ 6.45
immutable-x
Immutable (IMX) $ 2.40
cosmos
Cosmos Hub (ATOM) $ 8.83
stellar
Stellar (XLM) $ 0.119412
dogwifcoin
dogwifhat (WIF) $ 3.38
okb
OKB (OKB) $ 55.56
pepe
Pepe (PEPE) $ 0.000008
bittensor
Bittensor (TAO) $ 494.00
renzo-restaked-eth
Renzo Restaked ETH (EZETH) $ 3,160.01
arbitrum
Arbitrum (ARB) $ 1.19
vechain
VeChain (VET) $ 0.042198
xtcom-token
XT.com (XT) $ 3.05
kaspa
Kaspa (KAS) $ 0.127799
the-graph
The Graph (GRT) $ 0.292535
maker
Maker (MKR) $ 2,984.07
optimism
Optimism (OP) $ 2.56
fetch-ai
Fetch.ai (FET) $ 2.51