The cryptocurrency exchange reserves of Bitcoin (BTC) reached record lows below 2 million BTC in early April. With now less than 10% of Bitcoin’s circulating supply, an increased demand has the potential to cause a supply shock.
Notably, Finbold retrieved data from CryptoQuant on April 8 that shows 1.94 million BTC in all known exchange addresses. This represents around 9.8% of Bitcoin’s circulating supply of 19.67 million coins issued, by press time.
The exchange reserves have been in a downtrend since a peak of 2.85 million BTC in July 2021. On that note, these reserves diminish as Bitcoin investors withdraw the coins from these entities’ custody. A decision that shows intent to hold Bitcoin and not actively selling or trading it.
Meanwhile, BTC trades at $69,892, challenging the $70,000 psychological resistance level.
Bitcoin reserves in exchanges. Source: CryptoQuant
What is a supply shock and its price effects on Bitcoin?
A Bitcoin supply shock occurs when the a
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