Santiment reveals that Bitcoin supply is at its lowest level since 2017 and Ether since 2015, noting that while this trend doesn't guarantee price increases, it may contribute to the next bullish phase in crypto.
By Olivier Acuna|Edited by Omkar Godbole, Sheldon Reback Jul 9, 2026, 8:43 a.m. 4 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Santiment shared a chart on X depicting the lowest exchange supplies of Bitcoin and Ether in years. (Maxim Hopman/Unsplash)SummaryShow- The reserves of Bitcoin and Ether on centralized exchanges have dropped to the lowest levels seen in years, historically viewed as a bullish indicator due to reduced availability for sale.
- Experts suggest this metric is becoming less reliable as many cryptocurrencies have transitioned to institutional custody, ETFs, DeFi protocols, and other on-chain applications instead of being held in long-term cold storage.
- Nonetheless, a significant portion of Bitcoin and Ether is effectively held by companies anticipating long-term price appreciation.
One of Bitcoin’s BTC$62,824.18 most recognized bullish indicators is still garnering attention on social media, although its significance has diminished over time.
Traditionally, a decrease in the amount of BTC stored in centralized exchanges indicated that investors were moving their coins to self-custody. Fewer coins available for sale on exchanges typically suggests less selling pressure, which should support prices. This interpretation has been considered a reliable bullish signal since Bitcoin's inception, and the narrative continues to be echoed today, as noted by blockchain analysis firm Santiment.
“Historically, prolonged reductions in exchange supply have anticipated multi-quarter bull markets,” stated Mark Zalan, CEO of GoMining, the leading tokenized retail mining platform. However, he refrained from predicting when the next bull cycle might commence, stating, “Anyone who claims to know the exact timing is merely guessing with confidence, not making a forecast.”
This metric, however, is no longer as influential as it once was, primarily because supply has remained low for several months while Bitcoin's price has stagnated at around 50% of its all-time high. Some industry experts claim that this interpretation is outdated, as it fails to consider the increasing prevalence of institutional custody. The financialization of Bitcoin through alternative investment vehicles has altered the market dynamics, rendering this indicator less trustworthy.
“People used to interpret low exchange supply as a definitive bullish signal,” remarked Eneko Knorr, CEO of Stabolut, a multicurrency, yield-bearing stablecoin platform. “We have been experiencing this exceptionally low supply for over a year now. The market has matured, and a lot of that crypto has simply moved elsewhere – such as into staking, DeFi protocols for yield, or large institutional vaults.”
Santiment highlighted on X that the supply of BTC and Ether (ETH) on exchanges has dipped to their lowest since 2017 and 2015, respectively, referring to it as one of the most promising long-term indicators for the crypto market. As per Santiment's chart, Bitcoin's exchange supply is currently 6.6% of its total circulating supply, while Ether's is at 4.3%.
“Bitcoin and Ethereum are showcasing one of crypto's most promising long-term indicators: coins are being kept off exchanges,” Santiment stated. “This implies there are fewer coins readily available for sale, even after considerable market fluctuations.”
Given that Bitcoin and Ether still dominate the cryptocurrency landscape, low exchange supply could potentially pave the way for the next “sustained bull cycle,” according to the firm, although they cautioned that the market hasn't reached that point yet. The combined market cap of these two leading cryptocurrencies constitutes nearly 66% of the total market, according to CoinGecko data.
Shifting Crypto Dynamics
Today, however, when Bitcoin is withdrawn from an exchange, it does not always mean it is going into long-term cold storage. Some of it is being converted to wrapped versions like WBTC and moved into DeFi protocols. Thus, although exchange balances are declining, the economic exposure remains active and liquid in decentralized markets, where it is traded, used as collateral, or lent out.
A comparable situation exists with spot Bitcoin exchange-traded funds (ETFs). When demand from investors increases, issuers purchase Bitcoin to create new shares, withdrawing coins from exchanges or over-the-counter markets into institutional custodians such as Coinbase Custody, Fidelity Digital Assets, and BitGo. This process reduces the visible supply on exchanges, but the ETF shares themselves, which represent liquid and regulated exposure to BTC, continue to be actively traded on traditional stock exchanges.
The exchange balance metric and the discussions surrounding it often overlook the financialization of BTC, which is a significant oversight given the expanding size of ETFs. Coinglass data indicates that U.S. spot Bitcoin ETFs manage approximately $73 billion in net assets, which corresponds to more than 641,400 BTC. Meanwhile, Ether ETFs hold about $13.7 billion, representing approximately 7.7 million ETH.
“The overlooked aspect is that this metric illustrates the end of the exchange-custody era,” Ben Nadareski, CEO of Solstice, stated. The more significant narrative may not be the declining exchange balances themselves, but rather the destinations to which these assets are migrating.
“Assets are being transferred away from trading venues to two main places: regulated custody on one side and productive on-chain positions on the other,” he added.
Moreover, the notion that bull markets inevitably follow a consistent decline in exchange balances is not always accurate. For example, in 2022, the supply on exchanges remained low, yet prices plummeted significantly.
HODLing is Real
While this indicator may not be as trustworthy as it once was, it remains true that BTC is being accumulated by various market participants in anticipation of future price increases.
“More than 130 public companies currently hold Bitcoin on their balance sheets, and spot ETFs have captured an increasing share into regulated custody,” Zalan remarked.
According to Bitcoin Treasuries, public companies possess around 1,264,579 BTC, while private companies hold 281,752 BTC, government entities 649,954 BTC, DeFi and other protocols 369,595 BTC, and ETFs and exchanges account for 1,622,533 BTC. Their data also shows treasury companies hold approximately 7.252 million ETH.
Alongside nearly 7 million Bitcoins in dormant wallets, there exists a total of just under 11.2 million Bitcoins that are not actively traded, representing around 56.5% of the current circulating supply of approximately 20.05 million.
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