On-chain data shows that Bitcoin spot exchange inventory, which had been stuck in consolidation earlier, has finally started to follow a new trajectory.
Bitcoin Spot Exchange Supply Has Seen a Sharp Drop Recently
In a new article on X, analyst Willy Woo discussed the Bitcoin spot exchange inventory trend. This metric tracks the total amount of cryptocurrency that is in the wallets of all centralized spot exchanges.
This part of the exchange offering refers to the actual tokens of the asset that exist on the blockchain. The exchange offering that does not actually involve users owning BTC, as is the case with derivatives, is known as “paper BTC.”
When spot exchange inventory increases, it means that investors are depositing 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 selling purposes, such a trend may have a bearish impact on the price of the asset.
On the other hand, the decline in the indicator implies that foreign exchange outflows exceed foreign exchange inflows. Investors usually put their coins in personal custody when planning to hold them for the long term, so this type of trend can be bullish for the cryptocurrency.
Now here is a chart that shows the Bitcoin spot exchange inventory trend over the past two years:
As the chart above shows, Bitcoin spot exchange inventory saw a significant drop around the time of the FTX collapse in November 2022. This suggests that a significant movement of coins occurred out of these platforms as the asset’s bear market bottomed out.
Following this drop, the indicator began a consolidation phase that lasted throughout 2023 and most of 2024. The trend finally broke during the last two months of 2024, when the indicator recorded a sudden crash.
These capital outflows came alongside Bitcoin exploring new all-time highs, implying that investor accumulation may have played a role in this run. A total of 240,000 BTC left exchange-linked wallets during this drop.
Woo pointed out that Microstrategy’s purchases during this period amounted to around 192,000 BTC, meaning other whales in the market are withdrawing significant amounts from exchanges.
So far, the downward trend in spot exchange stocks has shown no signs of bottoming out as outflows have continued through 2025. If investors indeed maintain accumulation in the near future as well, then Bitcoin could benefit from further bullish momentum.
BTC Price
Bitcoin continued its strong recovery over the past 24 hours, with its price rising back above the $101,700 mark.
