On-chain data shows that Bitcoin spot exchange stocks, which were stuck in a consolidation phase earlier, have finally begun to follow a new path.
Bitcoin spot exchange supply has seen a sharp decline recently
In new mail At X, analyst Willie Wu discussed the trend in Bitcoin spot exchange stocks. This metric tracks the total amount of cryptocurrency held in the wallets of all centralized spot exchanges.
This part of the exchange offer refers to the actual tokens of the asset on the blockchain. An exchange offer that does not involve users actually owning Bitcoin, as is the case with derivatives products, is known as “fiat Bitcoin.”
When spot exchange stock rises, it means that investors are depositing a net number of coins into wallets linked to these platforms. Since one of the main reasons why coin holders transfer their Bitcoin to exchanges is for selling purposes, such a trend can have a downward impact on the price of the asset.
On the other hand, a lower index means that exchange outflows exceed exchange inflows. Investors typically take their coins into self-custody when they plan to hold them for the long term, so this type of trend can be bullish for the cryptocurrency.
Now, here’s a chart showing the trend in Bitcoin spot exchange stocks over the past two years:
As shown in the chart above, Bitcoin spot exchange inventory saw a significant decline around the time of the FTX crash in November 2022. This suggests that there was a significant movement of coins out of these platforms as the bear market for the asset reached its bottom.
After this decline, the index began a phase of consolidation that lasted throughout 2023 and most of 2024. The trend finally broke in the last two months of 2024, when the gauge recorded a sharp collapse.
These outflows came alongside Bitcoin exploring all-time highs, meaning accumulation from investors may have played a role in the rally. In total, 240,000 BTC exited wallets linked to the exchange during this decline.
Woo noted that Microstrategy’s purchases in this period amounted to about 192,000 BTC, meaning there are other whales out there in the market taking large sums of money from the exchanges.
So far, the downtrend in spot stocks has shown no signs of bottoming out, with outflows continuing into 2025. If investors indeed continue accumulating in the near future as well, Bitcoin could benefit from some additional upward momentum.
Bitcoin price
Bitcoin continued its sharp recovery over the past 24 hours as its price rose back above the $101,700 level.