A reduction in the supply of the leading cryptocurrency available on trading platforms suggests that Bitcoin’s price might be poised for an upward surge.
That perspective comes from a researcher at analytics firm CryptoQuant. In a Monday report, the analyst noted that the amount of bitcoin held on exchanges has fallen from 2.8 million to 2.67 million since February.
Bitcoin recently changed hands at $83,485. While flat over a 24-hour period, it has gained 8% over the past 30 days following its strongest quarter in years. This strong performance in August and September has prompted several analysts to proclaim that the bear market has concluded.
“If buying demand continues to improve while exchange supply remains low, BTC could benefit from a supply-demand imbalance, creating favorable conditions for a longer-term upward trend,” stated the report authored by on-chain researcher Rei Researcher.
The report further pointed out: “More importantly, in recent weeks, bitcoin has recovered from its lows while exchange reserves have continued to decline. This is a notable development, suggesting that the supply readily available for trading is decreasing even as the market recovers.”
Additionally, the analysis mentioned that investors may be withdrawing their bitcoin from exchanges to store it in cold storage solutions.
During the first half of 2026, Bitcoin primarily traded below $65,000. The digital asset spent the majority of the year mired in a bear market following its all-time high of $126,080 reached in October 2025.
However, market dynamics shifted in August. The U.S. Treasury announced plans to double the size of its liquidity-support buyback operations, which weakened the U.S. dollar while giving a boost to bitcoin and other non-yield-bearing assets.
As a result, analysts note that the debasement trade—where investors allocate capital to assets as a hedge against currency devaluation—has heated up once again, benefiting bitcoin much as it did throughout 2024 and 2025.
Even with these recent gains, Bitcoin’s price remains more than 30% below its all-time high.
What is happening to the supply of Bitcoin on exchanges?
The amount of bitcoin stored on exchanges has decreased from 2.8 million to 2.67 million since February.
Why are exchange reserves of Bitcoin dropping?
Researchers suggest investors may be moving their bitcoin off exchanges and into cold storage solutions.
What is the debasement trade?
It is a strategy where investors put money into assets to hedge against a currency losing its value.
How far is Bitcoin from its record price?
Bitcoin’s price remains more than 30% below its all-time high of $126,080.
