On-chain data shows that the inventory of the Bitcoin spot exchange, which had been involved in consolidation earlier, has finally started following a new direction.
Bitcoin Spot exchange supply has dropped significantly recently
In new post on X, the analyst Willy Woo has talked about the movement in the Bitcoin spot exchange stock. This metric tracks the total amount of digital currency sitting in the wallets of each centralized spot exchange.
This part of the exchange provision refers to the actual token of the asset that exists on the blockchain. “The exchange provision that does not involve users in owning BTC, as is the case with derivatives products, is called “BTC paper.”
When the spot exchange table rises, it means that the investors deposit a net number of coins into the wallets associated with these platforms. Since one of the main reasons why holders may transfer their BTC to exchanges is for sales-related purposes, such a move can have a bearish effect on the price of the asset.
On the other hand, the decreasing sign means that the exchange outflows are higher than the exchange inflows. Investors usually take their coins into self-storagewhen they plan to hold in for the long term, so this kind of move can be positive for the cryptocurrency .
Now, here is a chart that shows the trend in the Bitcoin spot exchange rate over the past two years:
As shown in the graph above, the spot Bitcoin exchange inventory has fallen significantly around the time of the FTX is going down back in November 2022. This indicates that a large movement of coins out of these platforms occurred as the asset's bear market bottomed out.
After this fall, the indicator began a consolidation phase that lasted throughout 2023 and most of 2024. The trend finally broke in the first couple of months of 2024, when the metric registered a sharp crash.
These flows came out alongside Bitcoin's search for new all-time highs, meaning a rally from investors may have played a role in the run. In total, 240,000 BTC left the exchange-related wallets during this fall.
Woo has pointed out that Microstrategy's purchases during this period included approximately 192,000 BTC, which means that other whales are present on the market taking large amounts off the exchanges.
So far, the decline in spot exchange inventories has shown no signs of bottoming out, as outflows have continued until 2025. If investors indeed continue to accumulate soon too, Bitcoin could benefit from another supportive move.
BTC price
Bitcoin has continued its sharp recovery in the last 24 hours as its price has broken back above the $101,700 mark.
