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Bitcoin exchange balances trend back to historic lows as BTC withdrawals resume in January

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Bitcoin (BTC) exchange reserves are nearing record lows as the year 2022 rekindles buyer interest.

As of January 4, according to data from on-chain analytics firm CryptoQuant, reserves across 21 exchanges totalled 2.308 million BTC.

Exchanges have returned to a downward trend in BTC balances

CryptoQuant reported that late December saw a macro low of 2.303 million BTC left on exchange books, before a small increase to 2.334 million.

Bitcoin exchange reserves chart. Source: CryptoQuant

resumed, in keeping with forecasts that larger-volume buyers would enter the market in Q1.

Data on the exchange balance is a hot issue this week. Different sources of data use different quantities of exchanges and wallets, resulting in data that is barely comparable.

For example, CryptoQuant’s 21 exchanges compete with 18 Glassnode-monitored exchanges and 5 CoinMetrics-monitored exchanges.

On Christmas Eve, according to Cryptorank, the balance was merely 1.3 million BTC.

The trend may fluctuate depending on the platforms covered, as some exchanges have experienced an overall decrease in their balance over the last month, while others have seen a rise.

Bigger fish to run the show

Analyst David Puell, inventor of the well-known Puell Multiple indicator, gave his predictions on impending market participant behaviour in a recent interview with CryptoQuant.

The “calm” character of Bitcoin in 2021, as opposed to, say, 2019, has deterred retail investors and their “FOMO.”

“I believe this is healthy in the long run,” he remarked.

“The market will be dominated by institutional participants, especially in month-to-month price fluctuations, with some profit-taking from early adopters but a far smaller role for retail players.”

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