Cryptocurrency Exchange Reserves Have Fallen to Multi-Year Lows

The total supply of bitcoin on the market is actively decreasing. This is evidenced by the fact that the currency reserves of large centralized exchanges have recently reached multi-year lows. At the same time, the active growth in the price of bitcoin indicates a growing shortage, which could lead to a rapid increase in volatility.

The current situation suggests that market participants prefer to withdraw assets for storage. For bitcoin itself, this is considered a bullish factor. The fact is that the supply on the market is decreasing, which, under stable demand conditions, means potential price growth. The global chart of cryptocurrency exchange reserves shows that this indicator has been steadily declining since the beginning of 2022.

At that time, the digital asset market was not in the simplest situation. At that time, the key interest rate of the U.S. Federal Reserve was held at a high level. This had a significant impact on the overall level of liquidity in the global market. As a result, traders focused primarily on risk limitation rather than quick profit.