Bitcoin Exchange Reserves Fall to Record Low, Could $120K Come?

Bitcoin has reached new highs in recent weeks due to positive momentum. Recent study suggests that this momentum is not random as it occurs amid massive behind-the-scenes actions.

Recently, Bitcoin reserves plunged to a record low of 2.4 million, suggesting a “supply shock” that has boosted Bitcoin's price.

This decline in exchange reserves and robust demand have produced a bullish climate that might lead to price hikes.

Supply Shock Ahead

A gradual fall during 2024 led to the present levels, indicating a change in investment behavior. Baykus stated that institutional investors have adopted long-term holding strategies, withdrawing assets off exchanges. Analyst added:

Institutional investors have increasingly adopted the “hodl” method, showing significant confidence in Bitcoin's future.

Bitcoin's price started the year around $40,000 and accelerated in November to over $100,000, peaking at $104,000. The Baykus wrote:

Bitcoin's limited supply and dwindling reserves are optimistic for the market. Bitcoin may set new milestones in late 2024 and early 2025 if investors price in the supply shock.


This measure follows Coinbase activity, one of the region's main exchanges, and has been used to anticipate short-term price swings. Over the last two weeks, the Coinbase Premium Index and Bitcoin's price have diverged, raising worries.

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