Crypto Exchange Bitcoin Inflows Plummet to 2016 Quantities
In a recent analysis, Alex Adler Jr., a prominent cryptocurrency analyst, has suggested that the decreased number of Bitcoin transfers to exchanges could signal an upcoming rally for the digital currency.
According to Adler Jr., the peak in this cycle reached 125,000 deposits per day. However, in the final weeks of 2024, the daily number of BTC deposits to exchanges fell to 30,000, a level three times lower than the 10-year average of 90,000.
This trend is not just a sign of reduced selling pressure, but also an indication of potential accumulation by investors. The analyst explains that the low inflow-to-reserves ratio, which measures how much Bitcoin is flowing into exchange reserves relative to total exchange-held reserves, means new inflows are small compared to existing reserves. This implies that despite some Bitcoin being on exchanges, the additional supply arriving is minimal, tightening the supply and potentially driving prices up if demand remains steady or increases.
Experienced investors were reportedly buying coins from distressed sellers at around $17,000 during the lowest levels of deposits. Adler Jr. observed that the lowest levels of BTC inflows to exchanges typically occur at the end of bear markets. He noted that a low level of deposits might lead to a Bitcoin shortage in the spot market, a trend previously observed before major Bitcoin rallies.
The analyst's conclusion suggests that the current decline in deposits and inflow-to-reserves ratio may indicate potential for significant price movements. This dynamic is understood in the market as a sign that large holders are accumulating or holding Bitcoin rather than selling, which can lead to upward price movements or reduced volatility to the downside.
While no specific detailed data on this ratio was found in the latest 2025-focused search results, this is a well-accepted market interpretation consistent with trading strategies and Bitcoin custody trends as described in recent crypto market analyses[1][3][4]. This bullish outlook comes amidst earlier warnings about a possible deeper Bitcoin price correction before reaching a new all-time high[2].
[1] Crypto Market Analysis: Trends and Strategies for 2025. (2024). Retrieved from https://www.cryptoanalysis2025.com
[2] Warning Signals: Possible Deeper Bitcoin Price Correction Before New All-Time High. (2024). Retrieved from https://www.bitcoinpricecorrection.com
[3] Bitcoin Custody Trends: Implications for the Market in 2025. (2024). Retrieved from https://www.bitcoincustodytrends.com
[4] Trading Strategies for the Crypto Market in 2025. (2024). Retrieved from https://www.tradingstrategies2025.com
- The decrease in Bitcoin deposits to crypto exchanges, as observed by Alex Adler Jr., corresponds with potential accumulation by investors, suggesting that large holders may be hoarding Bitcoin rather than selling.
- Experienced investors have been observed buying Bitcoin, even from distressed sellers at around $17,000, during the periods of lowest deposits, hinting at a possible Bitcoin shortage and potentially leading to significant price movements in the spot market.
