An all-time price record was shattered on October 5, 2025,
with Bitcoin shooting past $125,700. Leveraging the surge of a traditionally bullish period of "Uptober," it suddenly peaked and plunged in mid-September. The rally has since regained momentum, extending weekly gains to above 11%.
While the price action gets the headlines, the emptiness of centralized exchange reserves is shaping up to be the real story.
These shrinking liquidity lows, coupled with strong demand, are painting a highly bullish picture in favor of price analysts.
The Supply Squeeze: Exchange Reserves Are in Flux
The starkest factor fueling the rally is the drying up of Bitcoin balances held on centralized exchanges.
• Its Highest Level Since 2019: Total BTC held on exchanges • dropped to about 2.83 million (per Glassnode data), the lowest since mid-2019. CryptoQuant reports an even lower 2.45 million BTC, reaching a seven-year low.
• Enormous Outflows: Investors withdrew over 114,000 BTC (about $14 billion) from the exchange wallets in just two weeks.
• Long-Term Accumulation: Analysts see these massive withdrawals- transferring coins into cold storage or private custody- as a positive sign of long-term accumulation and not imminent selling.
The main takeaways here are that BTC on exchanges is basically the "available supply" that can be sold. The coffering of coins into cold wallets and corporate treasuries thereby effectively takes them off the liquid market. Consequently, a lack of available supply translates into any significant surge of buying pressure from institutions, an ETF, or even retail causing a sharp rise in prices. Some analysts have sarcastically warned of an "official shortage."
Institutional HODLing Strengthens the Trend
A continuing supply squeeze is maintained by institutional accumulations. Strategy Inc. (MicroStrategy) is a living example of this trend:
• Record Holdings Value: The company's never-sold Bitcoin holdings acquired since 2020 are now worth $77.4 billion, up from $41.8 billion at the end of 2024.
• Tax Relief: Recent IRS guidance exempting unrealized Bitcoin gains from certain taxes has saved Strategy Inc. billions on paper profit and has greatly encouraged long- term corporate holding ("HODLing").
This example of a corporation, alongside growing interest from ETFs and retail, spells out that accumulation is truly widespread and not just speculative hype.
What Is Next?
With Bitcoin supply being ever so tight and demand holding firm, analysts are now keeping close watch on a critical technical level.
A firm break of the $126.5K could be the catalyst towards the next phase of the big bull run. A combination of record-breaking prices with exchange reserves at multi-year lows speaks for tighter liquidity and stronger potential for further gains in the market.
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