Bitcoin Exchange Flows Hit 10-Year Low: Consolidation or Supply Shock?

Bitcoin is once again at a pivotal moment, trading near $107,000 after a turbulent week marked by sharp moves and high uncertainty. The leading cryptocurrency briefly lost the $100K mark following geopolitical tensions but rebounded strongly, gaining over 5% in less than 48 hours. This swift recovery highlights the extreme volatility dominating the market, with no clear trend direction established yet. According to data from CryptoQuant, the average volume of Bitcoin flows—calculated by combining exchange inflows and outflows—has dropped to its lowest levels in 10 years. The drying up of liquidity suggests a broader market consolidation phase, where both buyers and sellers are waiting for clearer macro or technical signals. While reduced exchange activity often points to investor indecision, it can also indicate that a supply squeeze is building in the background, especially if large holders are moving coins into cold storage. Bitcoin researcher Axel Adler Jr. noted that the average volume of flows (Inflow + Outflow) on centralized exchanges has decreased to 40,000 BTC per day – this is the lowest figure in the past 10 years. A significant portion of BTC has left the platforms, which is a sign of consolidation and potential liquidity shortage. Fewer inflows could mean investors are moving their BTC into self-custody wallets, reflecting confidence in Bitcoin as a long-term store of value. As reported, overall exchange BTC balances are at their lowest in seven years. Bitcoin balance on exchanges is 2.92 million BTC as of June 25, levels last seen in June 2019, as per Glassnode data. Katalin Tischhauser, head of research at digital asset banking group Sygnum, stated that Bitcoin is entering a period of supply shock that could have more dramatic price implications than in previous cycles. The limited liquid supply of Bitcoin relative to the large pools of institutional capital on the demand side is a reason for a possible spike in BTC price over the coming months. Data from onchain analytics platform CryptoQuant reveals that the daily average volume of flows on exchanges hitting 10-year lows on June 25. Bitcoin researcher Axel Adler Jr. noted that “the average volume of flows (Inflow + Outflow) on centralized exchanges has decreased to 40,000 BTC per day - this is the lowest figure in the past 10 years,” adding: “A significant portion of BTC has left the platforms, which is a sign of consolidation and potential liquidity shortage.” According to Umair Younas, decreased exchange flows could bring about huge market movement. Formerly, such decreased flows have led to periods of reduced market participation or price rallies. Hence, amid the continuous macroeconomic uncertainty driven by geopolitical tensions, Bitcoin's current decreased flows may pave the way for a massive market movement, especially while institutions are taking significant interest. Moreover, about 70% of the Bitcoin supply hasn't moved in at least a year, a sign that liquidity is drying up. With the addition of increasing demand from spot exchange-traded funds (ETFs), public companies and even sovereign wealth funds, the result is a tightening market that has analysts warning of a potential supply shock, a moment when available Bitcoin on exchanges becomes too scarce to meet demand, potentially triggering sharp price moves.