Crypto's Vanishing Act: Exchanges Running Low on Bitcoin and Ether, but the Old Magic Trick Has Lost Its Punch 🥁

Bitcoin and ether balances on centralized exchanges have fallen to their lowest levels in years, with the total amount of bitcoin stored on exchanges at an all-time low since 2017 and ether at an all-time low since 2015, according to blockchain analytics firm Santiment, which posted a chart on X showing the figures. Despite the historic drawdown, multiple industry observers caution that the metric no longer carries the same bullish weight it once did, because large portions of the supply have migrated into institutional custody, ETFs, DeFi protocols and staking rather than long-term cold storage. Bitcoin was trading around $62,718.45 at press time, roughly 50% below its peak, even as exchange balances have remained depressed for months. Mark Zalan, CEO of GoMining, said in an interview that "historically, sustained drawdowns in exchange supply have preceded multi-quarter bull phases," while declining to put a date on when any bull cycle might begin. "Anyone who tells a journalist they know the exact turn is guessing with confidence, not forecasting," Zalan added. Eneko Knorr, CEO of Stabolut, said "people always used to look at low exchange supply as a clear bullish sign," noting that "we've had this super-low supply for over a year now. The market grew up, and a lot of that crypto just moved somewhere else – like staking, DeFi protocols to earn some yield, or big institutional vaults." Onchain data show bitcoin's Long-Term Holders steadily absorbing circulating supply, with the Long-Term Holder Net Position Change returning to positive territory and confirming a shift from distribution toward renewed accumulation. Supply held by Long-Term Holders approached 15 million BTC, while Short-Term Holder supply declined to roughly 16.75 million BTC, suggesting bitcoin continued moving from shorter-term participants into stronger conviction holders. HODL Waves and a rising illiquid supply show older coins remaining dormant despite recent volatility, and the Accumulation Trend Score indicated continued buying across smaller and medium-sized wallets. Persistent withdrawals and ongoing negative netflows indicate that institutional and longer-term holders prefer to store their coins through self-custody models such as ETFs or corporate treasuries rather than on exchanges, removing additional coins from potential sales. Analysts note that while the migration reduces short-term selling pressure, tightening supply alone may not sustain a recovery, and a lasting uptrend would still require stronger buying demand to absorb available liquidity.