Bitcoin Price Rises Amid Shrinking Exchange Supply

Bitcoin price traded steadily near $104,000 this week as market participants prepared for a potential breakout.

Bitcoin price traded steadily this week as market participants prepared for a potential breakout. A narrowing supply of Bitcoin across exchanges and OTC desks has created conditions that could spark a sharp upward move.

Bitcoin Exchange Supply Hits 6-Year Low

Available Bitcoin on exchanges has fallen to the lowest level in over six years, setting the stage for a potential parabolic move in price. Centralized exchanges currently hold 2.17 million BTC. This compares to 2.72 million in January 2024.

A smaller exchange supply usually limits sell-side pressure and could support a strong move in the opposite direction. In January, when exchange supply fell below 2.5 million BTC, Bitcoin price went on to rally to over $100,000. Since then, the cryptocurrency has seen limited downside and tested the $90,000 support on several occasions.

Over-the-counter desks have also seen a reduction in available Bitcoin, which signals reduced liquidity for large off-exchange transactions. OTC supply has fallen to 120,000 BTC. This compares to nearly 500,000 BTC in late 2021.

This chart doesn’t lie.

Bitcoin OTC liquidity is drying up fast.

Sellers are gone. Supply shock is coming.

How high do you think $BTC goes in 2025? pic.twitter.com/hciqWSrg4h

— Merlijn The Trader (@MerlijnTrader) May 16, 2025

The declining supply aligns with increased market activity and larger inflows into long-term holdings. This shift in Bitcoin distribution reduces immediate selling potential and builds a solid case for further price gains.

The reduced supply across all major platforms also strengthens Bitcoin price resilience. A lack of sellers at lower price ranges may limit any potential corrections.

Bitcoin Price Awaits Breakout vs All-Time High

The decreased supply across exchanges and OTC desks comes as Bitcoin price approaches its all-time high of $109,300 with strong technical backing. The 50-day and 100-day Exponential Moving Averages are trending upward, reinforcing short-term strength.

This alignment suggests sustained momentum, and as the price trades above both averages, it indicates potential for further gains. A successful breakout could push the price beyond $110,000, a significant psychological barrier.

If Bitcoin price breaks past the $109,300 level, it could attract additional buying activity and reinforce positive sentiment. The consolidation below the resistance appears orderly, increasing the probability of a breakout.

If Bitcoin price fails to break above the pennant pattern and the 100-day EMA, it may face selling pressure, leading to a deeper correction. However, with strong institutional activity and reduced exchange supply, any pullbacks could be limited.

As the cryptocurrency approaches its all-time high, its price action will be closely watched by market participants. With supply drying up and demand holding firm, BTC price may set a new record high in the coming weeks.