- Bitcoin is witnessing a major supply squeeze as exchange reserves drop by 35% in a year.
- Bitcoin’s long-term holders have accumulated over $125 billion, signaling strong confidence in its future price surge.
Long-Term Holders and Institutional Buyers Fuel a Brewing Bitcoin Supply Squeeze
As Bitcoin flirts with the $110,000 level, a dramatic shift is quietly unfolding beneath the surface. On-chain data reveals a tightening supply dynamic and growing investor conviction that could ignite BTC’s next explosive rally.
Smart Money Is All In: $125 Billion Added by Long-Term Holders
Long-term holders (LTHs), often regarded as the “smart money” of crypto, have quietly scooped up over 1.15 million BTC since Bitcoin was trading in the $61,000–$83,000 range. According to on-chain analyst Axel Adler Jr., this accumulation spree is now worth more than $125 billion. With their average unrealized profit at 51%, these investors are showing no signs of selling.
Their resolve is a powerful signal. LTHs tend to have a long-term vision and are typically unfazed by short-term price action. Their steady accumulation reinforces the bullish narrative that Bitcoin’s macro trend remains robust—and may be setting the stage for the next leg higher.
Retail FOMO Grows, But Institutions Are Silently Buying
Meanwhile, retail investors are showing clear signs of FOMO, with Santiment reporting the second-largest retail sentiment spike in two weeks. Historically, retail surges can signal a local top—but this time, the backdrop is different.
Institutional support is quietly growing. Coinbase Premium, an indicator of U.S. institutional demand, has been rising, suggesting that whales and funds are stepping in. According to analyst Crypto Dan, this type of buying is typically more sustainable and less volatile than retail-driven pumps.
The Supply Squeeze Is Real: Exchange BTC Drops by 35%
Perhaps the most bullish signal yet: the amount of Bitcoin held on exchanges has plunged by 35% in the last year. BaykusCharts notes that exchange wallets now hold just 1.01 million BTC, down from 1.55 million in July 2024.
This dramatic decline in exchange reserves signals investor intent to hold, not sell. It’s a textbook setup for a supply squeeze—one that could send Bitcoin surging when demand inevitably spikes.
Is the Next Bitcoin Explosion Closer Than We Think?
With long-term holders accumulating, institutions quietly buying, and exchange supplies drying up, the market is primed for a major move. If demand returns in full force, the lack of available BTC could create the perfect storm for another record-breaking rally.
