Binance Research said a cluster of Bitcoin on-chain indicators points to tighter available supply and reduced selling pressure, with exchange rates falling to a six-year low as around 500,000 BTC have left trading platforms since the COVID-era peak.
On May 17 wireBinance’s research arm argued that four metrics now point in the same direction: long-term holders remain dominant, speculative activity is subdued, exchange supply has declined, and short-term holders are only just beginning to rebuild unrealized gains. The combined reading suggests, according to Binance Research, that Bitcoin’s market structure has shifted from forced selling to a more supply-constrained setup.
“Four signals on chain point to the same conclusion: supply is tightening and selling pressure is exhausted,” Binance Research wrote.
Why Bitcoin Selling Pressure Is Rapidly Eating
The first signal focuses on the dormancy of Bitcoin supply. Binance Research said nearly 60% of BTC supply has not changed in more than a year, compared to 27% in 2012. Dormant supply peaked at 69.5% in January 2024, the same month that US spot Bitcoin ETFs were approved.
“Despite the subsequent sell-the-news reaction, supply slump has remained at historically high levels, indicating continued long-term holder conviction,” the company wrote.
Related reading
For market participants, the implication is simple: Much of Bitcoin’s supply remains in the hands of holders who have shown little willingness to transact even after major market events. High dormancy does not eliminate downside risk, but it can reduce the amount of supply immediately available to be sold in rallies or volatility spikes.
The second metric cited by Binance Research was SLRV, a ratio used to compare shorter- and longer-term coin activity. The company said the indicator remains “deep in its historical bottom zone,” which it interpreted as a sign of market apathy rather than overheated speculation.
“Long-term holders dominate the supply, while short-term speculators have largely retreated,” Binance Research said. “Historically, each previous cycle bottom coincided with the ratio entering the shaded zone.”
That framework is notable because it separates the current setup from periods driven primarily by fast-moving speculative capital. According to Binance Research’s interpretation, the low SLRV level suggests that short-term market participants have already been significantly flushed out, leaving long-term holders with a greater share of active supply influence.
Related reading
Exchange balances are the third and most direct supply signal. According to Binance Research, Bitcoin held on exchanges has fallen from 17.6% of supply during the COVID-era peak to 15.0% today. The company said this equates to approximately 500,000 BTC leaving the exchanges, reducing the available supply on the sell side to a six-year low.
That move matters because coins held on exchanges tend to be more liquid and easier to buy. A decline in currency balances does not automatically mean that these coins will never return, but it does indicate that less BTC will immediately be positioned on trading platforms. In a market where marginal liquidity often drives price action, the shift could sharpen the impact of new demand if selling remains limited.
The fourth signal concerns short-term shareholder profitability. Binance Research said the BTC STH MVRV remained below 1.0 for most of the period since November 2024, a condition related to the gradual exhaustion of sell-side pressure. The measure has now moved back above 1.0, meaning short-term investors are once again sitting on unrealized gains.
“BTC STH MVRV has remained below 1.0 for most of the period since November 2024, gradually exhausting sell-side pressure – a dynamic historically consistent with cycle bottoms,” Binance Research wrote. “It has now regained 1.0, which marks the point at which short-term holders begin to rebuild unrealized gains. With profit accumulation still in its early stages, a new wave of selling pressure is unlikely to materialize any time soon – historically a setup that has preceded a sustained recovery.”
At the time of writing, BTC was trading at $76,761.
Featured image created with DALL.E, chart from TradingView.com