Bitcoin Supply on Exchanges Hits Multi-Year Low as Illiquid Holdings Soar to New Records

The Bitcoin market is experiencing a fundamental shift in supply dynamics that could reshape the trajectory of the current bull run. As of late February 2026, bitcoin supply on exchanges has plummeted to a multi-year minimum just below 3 million tokens, while simultaneously, the amount of Bitcoin held by long-term investors continues to climb to unprecedented levels. This bifurcation between available exchange inventory and locked-away holdings suggests investors are increasingly choosing to accumulate rather than trade.

According to Glassnode data, approximately 14.8 million BTC—representing 75% of the circulating supply of roughly 20 million—is now classified as “illiquid.” This metric tracks Bitcoin owned by long-term holders (LTHs) that remains off the market and not actively traded. The implications are striking: the vast majority of Bitcoin’s current supply is effectively removed from active circulation, creating what market participants view as a structural supply constraint.

Why Bitcoin is Flowing Out of Exchanges at an Accelerating Pace

The exodus of Bitcoin from exchange platforms has accelerated dramatically since early November 2024, marking a sharp reversal of a nearly two-year trend where exchange balances remained relatively stable. Over the past 30 days alone, Bitcoin holders have removed more than 185,000 tokens from exchange custody, the second-largest monthly withdrawal this year. This represents a decisive behavioral shift among market participants.

When Bitcoin flows out of exchanges at this pace, it typically signals genuine investor demand rather than speculative positioning. Exchange outflows often indicate that buyers are securing their holdings in self-custody or cold storage—a bullish signal for market confidence. In contrast, coins sitting on exchanges are often associated with leverage-heavy derivatives trading or readiness to liquidate, neither of which suggests sustainable upside pressure.

Looking at the five-year trend, Bitcoin on exchanges has remained confined within a relatively narrow band of 2.7 million to 3.3 million tokens. The current level near 3 million represents the lower end of this historical range, suggesting that this latest phase of withdrawal is significant even in longer-term context. However, for Bitcoin to sustain a robust bull run without triggering cascading liquidations, continued exchange outflows would reinforce that buying is driven by genuine conviction rather than overleveraged bets.

Illiquid Supply Climbing: Long-Term Holders Lock in Bitcoin

The rise in illiquid Bitcoin supply tells a complementary story to exchange outflows. Over the past month, illiquid holdings grew by more than 185,000 tokens—a pace that has only been exceeded once earlier this year. This behavior indicates that the dominant investor activity at present is accumulation, not profit-taking, which contrasts sharply with periods where LTHs are distributing their positions.

Research from CoinDesk reveals that since late November, LTHs as a collective group have been accumulating, adding over 2,000 BTC to their combined holdings rather than selling into rallies. This suggests that a critical phase—where long-term holders aggressively realize profits into strength—may be concluding. If this profit-taking cycle is indeed ending, it removes a significant headwind that has historically weighed on Bitcoin’s ability to sustain rallies.

The combination of shrinking exchange balances and climbing illiquid supply creates a tightening supply picture for traders and speculators seeking short-term liquidity. The $384 million sell wall between the current price and the psychological $100,000 level remains formidable, but underlying supply metrics suggest the market possesses building momentum for an upward push.

What This Supply Reallocation Means for BTC’s Next Move

Bitcoin’s most recent price action has reflected these supply dynamics. Following weeks of selling pressure, BTC recovered to around $69,000 via a sharp short squeeze that rippled through altcoins including ETH, SOL, DOGE, and ADA, as well as crypto-adjacent equities like Coinbase and Circle. However, analysts cautioned that this rebound appears technically driven by thin liquidity and bearish positioning rather than by fundamental catalysts. For a sustained structural uptrend to establish, Bitcoin would need to decisively breach resistance levels around $72,000 and $78,000 on a consistent basis.

Current market positioning shows some funds rotating into volatile altcoins and options during the rally, suggesting traders are gaining confidence but remain cautious about durability. The key differentiator will be whether Bitcoin’s supply on exchanges continues to contract, which would reinforce the signal that investors remain engaged in the bull cycle. At the same time, illiquid holdings reaching an all-time high of 14.8 million BTC indicates that supply scarcity is intensifying—a factor that could provide a lasting tailwind if exchange outflows persist.

The structural tightness in Bitcoin supply on exchanges, combined with record illiquid holdings, has created conditions where even modest buying pressure could trigger rapid repricing. For now, the market awaits confirmation that the current recovery can sustain above key technical levels while exchange outflows and LTH accumulation continue to reduce the float available for active trading.