Bitcoin holds near $65,260 as exchange reserves drop and US volume surges

Bitcoin exchange reserves are declining across daily, weekly and monthly windows even as US trading activity accelerates, indicating a supply squeeze.

Bitcoin held near $65,260 as exchange-held supply fell to fresh lows and US trading volume surged, showing active repositioning by holders.

Bitcoin exchange reserves declined across daily, weekly and monthly windows as of July 27, according to CryptoQuant data. The drawdown coincided with a sharp acceleration in trading activity, particularly during US hours, suggesting coins are being removed from exchanges even as market participants actively reposition. Spot Bitcoin ETFs recorded $358 million in outflows, adding to the $465 million that exited the funds on July 23 and 24, according to The Block.

Declining exchange reserves historically precede price appreciation by reducing available supply. With the Federal Reserve set to deliver its July 28-29 rate decision this week, traders are watching whether Bitcoin can clear resistance at $66,000 to $68,000 or risk a pullback toward the $62,500 support zone.

Bitcoin's market cap stood at roughly $1.3 trillion, with 24-hour trading volume of $16.07 billion, according to CoinMarketCap. The token's dominance rate held steady as altcoins including Ethereum and Solana posted stronger percentage gains, reflecting broader risk appetite across digital assets.

Supply Squeeze vs. ETF Outflows

The divergence between declining exchange reserves and cooling ETF flows presents a mixed signal. Spot Bitcoin ETFs had drawn nearly $1 billion in inflows through mid-July before the streak reversed. The $358 million in outflows for the week ending July 26 marked the largest weekly withdrawal since late June, according to The Block.

Long-term holder behavior supports the supply-squeeze narrative. Dormant Bitcoin activity fell to its lowest level since the third quarter of 2022, according to CryptoQuant, indicating that experienced holders are reducing sales into recent strength. This pattern historically aligns with accumulation phases that precede sustained upward moves.

The CLARITY Act's stalled progress in the Senate added a layer of regulatory uncertainty. Senate Majority Leader John Thune conceded the crypto market structure bill will not clear Congress before August, with prediction markets cutting 2026 passage odds to roughly 35%.

The combination of falling exchange reserves and rising US trading volume creates conditions for a potential supply squeeze, historically a bullish indicator for Bitcoin. Whether that materializes depends on this week's Fed decision and whether ETF outflows reverse. A close above $66,000 could open a path toward $68,000 resistance, while a break below $64,200 risks exposing the $62,500 support zone.

This article is for informational purposes only and does not constitute investment advice.