The Amount of Bitcoin on Exchanges Is Shrinking. Is a Rally Imminent?

Bitcoin’s price could be due a move upwards as the supply of the leading cryptocurrency on exchanges shrinks. 

That’s according to a researcher at data firm CryptoQuant, who wrote in a Monday report that bitcoin on exchanges has dropped to 2.67 million from 2.8 million since February. 

The price of bitcoin was recently $83,485, unmoved over a 24-hour period but up 8% over the past 30 days after having its best quarter in years. Its surge in August and September has led a number of analysts to declare the bear market is over.  

“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,” the report by on-chain researcher Rei Researcher read. 

It added: “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.”

The report further noted that it was possible investors were taking bitcoin off exchanges to put in cold storage solutions. 

Bitcoin’s price was mostly trading under $65,000 for the first half of 2026. The coin spent most of this year in a bear market following the all-time high of $126,080 it hit in October 2025.