Bitcoin Price Hits Record Highs as Exchange Balances Plunge

A sharp divergence has emerged between Bitcoin's exchange balances and its surging market price—signaling renewed long-term accumulation and supply tightening.

The latest Glassnode chart shows Bitcoin hitting new highs above $120,000 while exchange-held BTC drops to multi-year lows.

Bitcoin supply on exchanges continues falling

Since late 2024, the number of Bitcoin held on centralized exchanges has steadily declined. From a peak near 3.3 million BTC in mid-2024, balances have fallen below 2.8 million by July 2025. This drop reflects aggressive outflows likely tied to cold storage, self-custody, and institutional accumulation. Exchange balances last dipped this low during bull runs in 2020 and early 2021.

The most notable decline began in March 2025, just as Bitcoin reclaimed the $90,000 level. Since then, balances have dropped each month, with June and July showing the steepest monthly declines of the year.

BTC price soars above $120K amid shrinking supply

While exchange balances dropped, Bitcoin’s price soared. After consolidating around $90,000 through early 2025, BTC broke above $100,000 in April and climbed aggressively into July. The price surged past $110,000 in late June and topped $120,000 in early July, even as fewer coins remained available on exchanges.

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This inverse relationship suggests growing demand is chasing shrinking supply. With fewer liquid BTC in circulation, each bullish breakout gains strength—pushing prices even higher.

Market outlook: bullish as supply squeeze deepens

Historically, falling exchange balances have preceded major bull runs. The current trend mirrors 2020–2021, when BTC exploded from $10,000 to over $60,000 in less than a year.

If exchange balances continue to decline while demand holds, Bitcoin may enter another parabolic phase. With ETF inflows, institutional interest, and macroeconomic tailwinds aligning, all signs point to a supply-driven bull market gaining momentum.

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.