Key Points:
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Bitcoin OnChain data shows stable consumption of exchange and OTC balances, pointing to long-term accumulation and tightening of supply.
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As BTC’s open interest approaches record highs and liquidity drys up, the market is tightly coiled, increasing the possibility of sharp movement.
Bitcoin (BTC) Prices have always risen, even if trading volumes drop to the lowest level since the 2023-2026 cycle began. The activity of retail investors has been softened and the rate of funds in a recent permanent exchange of negative territory. It’s an unusual backdrop for the all-time highs that drive the price.
However, below the surface, OnChain data points to other aspects: the invisible accumulation phase. Although the market appears calm, the supply side is quietly drying. There are Bitcoin futures Open interest The market coiled closely, hovering around record highs, laying the foundation for a perfect storm.
BTC held on exchange continues to decline
even though BTC requirementsespecially in the United States, the number of Bitcoin held by centralized crypto exchanges continues to decline. Since the beginning of 2025, the balance has fallen by another 14% to 2.5 million BTC, the last level seen in August 2022.
This trend usually indicates growth investor confidence and long-term holding behavior. Coins are being transferred to refrigerated or custodial wallets, reducing the supply of liquids available for sale. Large entities often withdraw BTC after purchase, thus enhancing the accumulation of ongoing views. Short-term sales pressure is weakened, and fewer coins are easy to dump.
Over-the-counter Bitcoin balance plunges
OTC (over-the-counter) desks that promote large non-trade transactions are also showing signs of tightening supply. Although these tables are usually run by matching buyers and sellers, they still rely on holding BTC reserves to execute quickly and trustworthyly.
At present, these reserves are at a historic low. According to CryptoQuant, the balance of miner-related OTC addresses has dropped by 19% since January and now holds only 134,252 BTC. This data summarizes addresses related to the mining pool from two different “1-hop” addresses, excluding the miner itself and the centralized exchange address.
When exchange and OTC liquidity dry up, the available floats shrink sharply. In a rising market, this dynamic can expand price movements as demand pursues increasingly scarce assets.
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The funding rate falls negative
In such a tight supply environment, prices can rise sharply even with moderate demand, especially when the market is positioned Wrong way. The funding rate illustrates this very well.
Funding rate is a regular payment between medium- and short traders of permanent futures contracts, reflecting the market’s targeted bias. Positive rate means longing shorts, usually a sign of bullish sentiment. Negative rates indicate short-term advantages and often local corrections are issued.
But when negative funds are consistent with the rise in BTC prices, that’s another matter. It shows that despite traders dominance, the spot market is absorbing selling pressure, which is a potential sign of potential demand.
This rare pattern appeared three times during this cycle, followed by a significant price increase. A fourth instance may have occurred recently: between June 6 and 8, the funding rate was negative, while BTC sold for $110,000 from $104,000.
This move suggests that the rally may still have legs, especially if short positions continue to be liquidated – a feedback loop can make the price higher.
At the moment, the Bitcoin market seems quiet, but that may be the point. The contracting liquid supply shows that Bitcoin will not increase the sentiment or quantity of euphoric investors, but is a growing mismatch between the massive use of leverage and real spot demand. In this setup, any forced liquidation or pricing misalignment in the derivative can trigger explosive movement.
This article does not contain investment advice or advice. Every investment and trading move involves risks and readers should conduct their own research when making decisions.
