Bitcoin On-Chain Signals Show Supply Tightening as Sell Pressure Fades, Binance Research Reports

TLDR:

• Nearly 60% of Bitcoin supply has not moved in over a year, reflecting strong long-term holder conviction.
• Exchange-held BTC has fallen to a six-year low as roughly 500,000 coins have permanently left exchanges.
• The SLRV ratio sits deep in its historical bottom zone, signaling market apathy and low speculation.
• BTC STH MVRV has reclaimed 1.0, marking the start of short-term holders rebuilding unrealized profits.

Bitcoin on-chain data is pointing to a notable shift in market conditions, according to Binance Research. The firm identified four key indicators suggesting that available sell-side supply may be tightening.

Exchange balances have fallen to a six-year low, while long-term holder conviction remains near historically elevated levels.

Short-term holders are also beginning to rebuild unrealized gains after months of sustained pressure. Together, these signals suggest a market that may be gradually working through exhaustion.

Supply Dormancy Climbs as Bitcoin Moves Off Exchanges

Nearly 60% of Bitcoin supply has not moved in over a year. That figure has climbed from 27% in 2012 and peaked at 69.5% in January 2024. That peak aligned with the approval of spot Bitcoin ETFs in the United States.

Despite the sell-the-news reaction that followed, dormancy held near elevated levels. This trend reflects sustained conviction among long-term Bitcoin holders. Binance Research noted supply dormancy has remained near historically elevated levels since the ETF launch.

Exchange balances peaked at 17.6% during the COVID-era market. Since then, they have fallen to 15.0%, meaning roughly 500,000 BTC left exchanges.

That steady outflow has pushed exchange-held supply to a six-year low. Binance Research pointed to this as a key factor reducing available sell-side supply.

With less Bitcoin sitting on exchanges, the pool of coins ready for liquidation shrinks. This structural shift has reduced immediate selling pressure in the market. It also reflects a growing tendency among holders to move assets into self-custody.

SLRV and STH MVRV Data Indicate a Potential Cycle Shift

The SLRV ratio has fallen deep into its historical bottom zone. This reading points to low speculative activity and a pullback from short-term traders.

Long-term holders currently dominate supply, while short-term actors have largely stepped away. Binance Research noted that every prior cycle bottom coincided with the SLRV entering this zone.

According to Binance Research, this signals a period of market apathy. This dynamic has repeated across multiple Bitcoin cycles and tends to precede stabilization. The firm described it as consistent with conditions seen at prior market bottoms.

The Bitcoin STH MVRV metric remained below 1.0 for much of the period since November 2024. A reading below 1.0 means short-term holders are on average holding unrealized losses.

Over time, this condition exhausts selling pressure as those inclined to sell have exited. Binance Research described this pattern as consistent with cycle bottoms.

The STH MVRV has since reclaimed the 1.0 level, a shift in short-term holder positioning. Short-term holders are beginning to carry unrealized gains once again.

Since this profit accumulation is still early, a new wave of sell pressure is unlikely imminently. Historically, this setup has preceded periods of sustained price recovery.

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