Bitcoin (BTC) exchange reserves have fallen to levels not seen since 2018, with the total supply on cryptocurrency exchanges standing at 2.35 million BTC as of January 13, according to CryptoQuant. This drop marks its lowest level in almost seven years and is believed to be due to institutional investors accumulating Bitcoin at discounted prices.
The largest token by market capitalization has faced sharp fluctuations over the past week, struggling to maintain its position above the $100,000 mark. After starting the week on a low note, Bitcoin soared to $102,000 on Tuesday, but fell more than $10,000 in the next 48 hours, hitting a low of $91,250 on Thursday on crypto exchange Bitstamp.
Bullish efforts to regain momentum today were thwarted, with Bitcoin price briefly returning to $96,000 before encountering further bearish pressure. At press time, the cryptocurrency was trading between $91,000 and $93,000.
Network activity levels decline, liquidations continue
Data from CryptoQuant shows that BTC exchange reserves have been declining since early December, when the coin’s price began consolidating between $95,000 and $96,000.
In addition to the decline in foreign exchange reserves, Bitcoin network activity is reaching its lowest level since November 2024. Metrics such as the spent profit ratio (SOPR) of short-term holders have fallen below 1, which which indicates that many short-term investors are selling. at a loss.
This behavior reflects growing unease among retail participants as Bitcoin faces pressure at key support levels. Market observers suggest that failure to meet current price thresholds could lead to further downward pressure.
Turbulent price movements have triggered significant sell-offs in the cryptocurrency market. Data from Coinglass revealed that total crypto liquidations stood at $670 million over the past 24 hours, with long positions accounting for $588 million, or 87.7% of the total.
Bitcoin alone contributed to $139.71 million in liquidations, with the largest order, valued at $8.21 million, occurring on Binance. The exchange also recorded the highest liquidation volume at $88.27 million, followed by HTX and OKX, which brought in $47.30 million and $42.66 million, respectively.
-BTC liquidation short positions saw relatively smaller liquidations, totaling $22.13 million, as the bears took charge of the overall market sentiment.
Hedge funds accumulate BTC and institutional interest increases
André Dragosch, head of research at Bitwise, highlighted this trend in an article on X, highlighting crypto hedge funds’ growing exposure to Bitcoin. “ The beta performance of global hedge funds relative to BTC has increased significantly, signaling increasing market exposure to Bitcoin and other crypto assets “, he noted.
The reduction in supply on the stock exchanges has sparked speculation about a potential “supply shock”. This phenomenon occurs when buyer demand encounters a decreasing amount of Bitcoin available for sale, often resulting in upward price momentum.
Meanwhile, on the one-year anniversary of the approval of US BTC spot exchange-traded funds, the funds continue their impressive performance. According to data from SoSoValue, Bitcoin earned $307.2 million during the week ending January 10, 2025.
Despite three days of outflows totaling more than $700 million, funds continued to perform well, with total net inflows for the week exceeding $1 billion.
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