Bitcoin and Ethereum Exchange Reserves Near Historic Lows, Santiment Data Shows

The proportion of Bitcoin and Ethereum held on centralised exchanges has fallen to levels close to historic lows, according to on-chain analytics firm Santiment, a development that traders and market-structure specialists read as a sign of thinning sell-side liquidity across both assets.

In an insight published this week and reported by Coincu, Santiment described exchange supply for both tokens as “still near bottom of the barrel” relative to their historical range. The metric tracks the share of circulating BTC and ETH held in wallets controlled by centralised trading platforms, a figure that has been declining over an extended period for both networks.

A liquidity signal, not a price forecast

Exchange supply is widely used by on-chain analysts as a proxy for how much of an asset sits one step away from a sale order. Coins held on exchanges can be liquidated almost instantly, while those moved into self-custody, cold storage or staking contracts require additional steps before reaching an order book.

When exchange balances contract while demand holds steady or rises, the resulting imbalance can, in theory, provide support for prices. Santiment’s data suggests this dynamic is currently in play for both Bitcoin and Ethereum, though the two assets arrive at the same outcome through different mechanics. Bitcoin’s fixed 21 million supply cap means each coin withdrawn from exchange circulation carries a proportionally larger effect on available float. Ethereum’s supply dynamics are additionally shaped by staking lock-ups and the EIP-1559 burn mechanism.

Santiment framed the trend as constructive, describing exchange reserves in a separate note as “still one of the encouraging signs for the long term,” positioning the data as consistent with a broader accumulation pattern among holders rather than a short-term trading signal.

Caveats for institutional readers

Analysts caution that exchange supply is one on-chain metric among several, and does not capture over-the-counter trades, derivatives exposure or macroeconomic shifts that could override the signal entirely. A sharp drop in retail or institutional interest could offset any tightening on the supply side, regardless of how few coins sit on exchanges.

The relationship between stablecoin flows and spot reserves adds a further layer of complexity: large outflows of tether from exchanges, for instance, can imply different market dynamics than equivalent ETH withdrawals. A sudden shift in monetary policy, a large forced liquidation event, or a change in derivatives positioning could each trigger renewed inflows to exchanges and reverse the current trend quickly.

What comes next

The key question for market-structure watchers is whether exchange balances continue to fall, stabilise near current levels, or reverse. Continued outflows would reinforce the accumulation narrative that Santiment and other on-chain analytics firms have highlighted. A plateau could indicate that outflows and fresh deposits have reached a rough equilibrium, while a meaningful reversal — particularly if driven by previously dormant wallets — would typically be read as an early warning of elevated selling pressure.

For institutions and trading desks that rely on on-chain reserve data as one input among many, the direction of travel in exchange balances is likely to matter more than any single data point, particularly as Bitcoin and Ethereum remain exposed to external catalysts ranging from monetary policy shifts to protocol-level developments such as staking yield changes.

Read more: Wintermute Warns Bitcoin’s Rebound Is a Relief Rally, Not a Regime Change