Bitcoin held on exchanges has fallen to 2.67 million coins from 2.8 million in February, according to a CryptoQuant researcher. The steady drain is happening even as the market recovers, cutting the supply readily available for trading just as buying demand shows signs of improving.
Bitcoin recently changed hands around $83,485, flat over 24 hours but up 8% over the past 30 days. It's still more than 30% below the record high of $126,080 set in October 2025.
Reserves fall through a bear-market year
The decline in exchange balances isn't new. It has been running through most of 2026, a year Bitcoin spent largely in a bear market, with the price mostly under $65,000 through the first half.
What's changed is the backdrop. August and September delivered Bitcoin's best quarter in years, enough that some analysts declared the bear market over. Through that recovery, reserves kept falling — a pattern CryptoQuant's report flags as unusual, since traders usually move coins back to exchanges when prices rise.
The report suggests investors may be moving bitcoin into cold storage instead. That's not a trading signal in itself, but it does mean less sellable supply sitting on order books.
The Treasury's buyback and the dollar
Part of the demand side comes from Washington. The U.S. Treasury said it would double the size of its liquidity-support buyback operations, a move that weakens the dollar and tends to strengthen bitcoin and other assets that don't pay a yield.
The 'debasement trade' — buying assets to hedge against currency devaluation — is active again, and bitcoin is catching the same bid it did in 2024 and 2025. That flows directly into the supply question: more buyers, fewer coins on exchanges.
Where a squeeze would show up first
CryptoQuant's report lays out the mechanics plainly. If buying demand keeps improving while exchange supply stays low, bitcoin could face a supply-demand imbalance, creating favorable conditions for a longer-term upward trend.
That's a conditional, not a forecast. The reserves number is the one to watch. It has fallen 130,000 BTC since February and hasn't reversed during the recovery.
The next real test is whether demand holds through the rest of the quarter. If reserves keep sliding while buyers stay in, the imbalance argument gets stronger. If exchange balances tick back up, the thesis weakens fast.
