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A pivotal moment is approaching for Bitcoin. Although its impressive $100,000 milestone continues to garner most of the public's attention, on-chain data is providing a more complex, and potentially hazardous, picture. Recent price movements and trends in exchange reserves indicate that Bitcoin might not be as stable as news reports suggest. Bitcoin is currently trading at about $104,600, but there are growing indications of weakness. The price has had difficulty regaining momentum after reaching a peak close to $110,000, setting lower highs on lower volume.
Technical analysis shows that Bitcoin is hovering above the 26-day EMA, a clear decline below $103,972 might intensify downward pressure and push the price back into the high-$90,000 range or lower. The exchange reserves contain the more telling indication. Data from CryptoQuant indicates that since early 2023, the amount of Bitcoin in exchange reserves has steadily decreased, falling from approximately 2.75 million BTC to just 2.43 million as of late May 2025.
The outflow of more than 300,000 Bitcoin in less than 18 months is astounding. Usually this type of pattern indicates custodial shifts to cold storage or increasing long-term holder conviction. However, the story changes when combined with weak price action. Theoretically, declining reserves should be bullish because they indicate less selling pressure. However, it indicates that demand is drying up even more quickly than supply is being pulled if prices continue to decline.
As a result, there may be a liquidity vacuum that would leave the market with less Bitcoin available but also fewer active buyers. Two possibilities are brought up by this discrepancy. One: If buyers return, an impending supply shock could spark a parabolic rally. The second is a structural collapse in which institutions have left and the market is left vulnerable.
The path of least resistance given the technical configuration is downward. A retest of $100,000 should be anticipated, and traders should prepare for a possible decline into sub-$98,000 territory unless Bitcoin finds support above its EMA and recovers higher highs. Even though the supply is decreasing, people's willingness to purchase is also declining.
Vladislav Sopov
U.Today Editorial Team