Bitcoin Supply Squeeze Weakens: 28,000 BTC Inflow Reclaims 84% of Recent Decline
According to Santiment data, Bitcoin’s exchange balance has increased by approximately 28,000 BTC since July 28, reaching 1.332 million BTC; this indicates that approximately 84% of the decline seen during the June 12-July 28 period has been reclaimed, and the balance has reached its highest level since June 15.
Santiment Intelligence revealed the reversal in Bitcoin’s supply held on exchanges since late July in data shared on August 17. This metric, tracked as “Supply on Exchanges,” monitors the amount of Bitcoin available on exchanges and ready for trading.
After the exchange balance peaked at approximately 1.337 million BTC on June 12, it dropped to the 1.304 million BTC level by July 28. During this period, approximately 33,000 BTC left exchanges. With the recovery that followed, it reached 1.332 million BTC on August 16, and 28,000 BTC of the previous outflow returned. Consequently, the decline that occurred over six weeks was largely reversed in less than three weeks.
Bitcoin Exchange Balance Rising Since July 28
Santiment data shows that the balance has leveled off at approximately 1.332 million BTC over the past few days. The current amount sits approximately 5,200 BTC below the June 12 peak. Therefore, while the movement in exchange supply weakens the supply squeeze narrative, it does not produce a price outcome on its own.
The simultaneous rise in exchange balances and ETF inflows does not create a mechanical contradiction. According to Santiment, Bitcoin acquired for the creation of ETF shares can be obtained from OTC desks or existing holders. These transactions do not require the withdrawal of Bitcoin from visible exchange wallets. Thus, the data does not establish direct causality between the two movements.
Exchange supply indicates the amount of Bitcoin ready to be traded in the market; an increase in the balance does not signify that a sale has taken place, but rather that the accessible supply has increased.