On December 2nd, news emerged that 10x Research pointed out in a recent report that the Bitcoin balances at cryptocurrency exchanges have reached a historic low, with on-chain data showing a sharp decline in the number of Bitcoins available for purchase.

The report stated that this stands in stark contrast to the trend at the end of summer, when a sudden influx temporarily replenished exchange reserves. However, this time there has been no such inventory increase, exacerbating supply tightening.

Analysts indicate that Bitcoin and the broader cryptocurrency market are being driven by favorable catalysts, suggesting continued growth in the coming year. On-chain analysis shows that long-term holders (often seen as a stabilizing force in the market) are firmly holding their positions, limiting Bitcoin inflows into exchanges and reducing liquidity.

It noted that currently only three major exchanges (Bitfinex, Binance, and Coinbase) report having sufficient Bitcoin reserves to meet buyer demand. Smaller exchanges are facing increasing challenges in maintaining liquidity, which could lead to heightened price volatility.