On June 1, 2025, Bitcoin (BTC) and Ethereum (ETH) reserves held on major centralized exchanges dropped to historic multi-year lows. This significant decline in exchange reserves suggests a tightening of spot supply, with Bitcoin reserves decreasing to approximately 2.5 million coins. Influential cryptocurrency analyst Crypto Rover highlighted that such a reduction often precedes increased price volatility and potential sharp price movements.
Institutional accumulation, along with long-term holders increasingly opting for self-custody over trading, appears to be driving this trend. Although no major corporate announcements have been made to confirm the outflows, the prevailing market dynamics indicate substantial accumulation and reduced selling pressure on exchanges. This scarcity of tradeable Bitcoin and Ethereum on centralized platforms could lead to a supply squeeze if demand rises, potentially triggering explosive price rallies.
Crypto data providers like Glassnode and CryptoQuant have been instrumental in tracking these movements, underscoring the importance of monitoring on-chain flows and exchange reserves for anticipating future market reactions. Historical data supports that previous instances of declining exchange reserves were often followed by notable bullish price trends. Traders and investors are advised to closely watch these key metrics amid an evolving market landscape influenced by growing institutional engagement.