For quite some time now, there have been rumors regarding a potential Bitcoin supply shortage on exchange. Following a new monthly low in exchange net flow, that may happen relatively soon. There’s also the dormant supply to keep an eye on.

Bitcoin Exchange Net Flow Dips Deep

Even though it may seem as if the Bitcoin market is in sideways trading mode right now, the overall exchange net flow tells a different story. Month after month, more BTC are withdrawn from public exchanges. A practical exodus of funds has been apparent since Q4 2020 and shows no signs of slowing down just yet. 

With a new monthly low for the exchange net flow, an exciting situation follows. In this period, there is a negative flow of over $48.6 million worth of BTC. A substantial amount equal to roughly 11,00 BTC to be removed from exchange holdings. No one knows where users are moving their funds to. Private wallets seem a logical source for these withdrawals. 


BlocDesk Exchange Net Flow
Source: Glassnode

It is not the first time there is a very low exchange net flow for Bitcoin lately. The previous one-month low dates back to February 5th, when Bitcoin was trading over $10,000 lower than it is today. A higher value pr BTC doesn’t automatically mean more exchange deposits, which is rather intriguing to behold. 

Even though there are fewer BTC in exchanges’ wallets, there is still much room for improvement. If a Bitcoin supply shortage has to be triggered, these numbers are too shallow to make a meaningful difference. A negative exchange net flow of $500 million, on the other hand, would be something spectacular to behold. It remains unclear if that is even possible under the current market conditions.

HODLing Remains Popular In 2021

Contrary to what some people may think, many people still hold their BTC off exchanges entirely. The supply last active over a year ago is reaching a fourteen-month low. More specifically, 56.17% of that Bitcoin supply has not moved in the past 12 months. A confirmation of people not panicking during the dip nor showing any intention of selling at $50,000 and more. 

Source: Glassnode

Keeping funds in one’s wallet is always the most viable approach. Unlike most other investment options on the table, Bitcoin is a long-term investment option that is best-known for rewarding those who are patient. Trading Bitcoin is certainly possible but will hardly ever yield the best results for anyone looking to make money. 

When combining these two statistics, there is no reason to doubt Bitcoin’s long-term price potential. Although the current momentum may not look too impressive, there is still room for future growth. Reaching $100,000 is a matter of time rather than a ludicrous dream.