Bitcoin Exchange Reserves Hit 6-Year Low — 3 On-Chain Signals Hint a BTC Price Surge Is Coming

Bitcoin is slowly gaining traction once more. Recent market turbulence caused by tariffs caused the top cryptocurrency to drop below the $80,000 mark, but it has since recovered well and is currently trading above $85,000. Not because of the headline excitement, but rather because of encouraging on-chain signs that indicate the Bitcoin market may be preparing for another leg higher, experts and investors are taking notice of this roughly 10% rally over the past week.

Bitcoin Exchange Reserves Hit 2018 Levels: What It Means for Price Action

On-chain Bitcoin price analysis is beginning to paint a bullish picture. According to a fresh analysis by CryptoQuant contributor BorisVest, several key indicators point to Bitcoin being undervalued in this cycle, despite its high nominal price. A major metric catching attention is the ongoing drop in exchange-held reserves, now at their lowest point since 2018. Only 2.43 million BTC remain on exchanges, a sharp decline from the 3.4 million peak during the 2021 bull market.

Chart 1: Bitcoin – Exchange Reserve – All Exchanges, published on TradingView, April 16, 2025

This signals a broader investor trend: accumulation and long-term holding, with fewer coins available for immediate sale, supply pressure drops, creating favorable conditions for upward price movement.

Chart 2: Bitcoin – Stablecoin Supply Ratio (SSR), published on TradingView, April 16, 2025

Adding to the bullish sentiment is the Stablecoin Supply Ratio (SSR), now hovering at 14.3. A lower SSR indicates there’s ample buying power in stablecoins relative to Bitcoin market cap. It suggests dry powder is sitting on the sidelines, ready to be deployed if confidence continues to grow.

Funding Rates Normalize: A Healthier Bitcoin Market Setup?

In contrast to past bull runs where overheated leverage created short-term risk, BTC funding rates have now normalized, sitting calmly between 0.00% and 0.01%. This shift reflects more balanced sentiment and a healthier futures market environment.

Chart 3: Bitcoin – Funding Rates – All Exchanges, published on TradingView, April 16, 2025

During previous price surges, high funding rates showed a piling on of long positions, increasing downside risk if sentiment flipped. But this time, funding rate neutrality means the market isn’t leaning too far in either direction, giving bulls some breathing room.

BorisVest’s report emphasizes how this normalization works hand-in-hand with declining Bitcoin exchange reserves and a stable SSR to create a “quiet strength” narrative. The fundamental dynamics of the Bitcoin network are still stable, despite the larger macroeconomic backdrop, such as Trump’s extensive tariffs and continuous monetary tightening, still casting a shadow.

Furthermore, past trends indicate that Bitcoin frequently experiences a breakout when Bitcoin exchange reserves fall but financing rates and SSR are stable. A mix of patience and positioning often leads to significant price discovery phases.

Looking Ahead: A Breakout or a Breather?

While Bitcoin’s on-chain signals are undeniably constructive, the question now is whether they translate into immediate price movement or lead to a period of quiet accumulation. Much will depend on how macroeconomic variables play out over the next few weeks.  Still, the data shows that sentiment within the bitcoin market has shifted back to neutral-to-positive territory – something not seen since the early days of this year’s rally. Investors appear confident but not euphoric, which historically has been fertile ground for sustained growth.

What’s Next: Bitcoin’s Foundation Looks Stronger Than Ever

Bitcoin’s recent price action isn’t just a bounce – it’s a signal. While the asset continues to face macroeconomic hurdles, the on-chain picture reveals a Bitcoin market quietly regaining its footing, supported by a thorough on-chain Bitcoin price analysis. From shrinking Bitcoin exchange reserves and stable stablecoin ratios to normalized funding rates, the groundwork for another potential surge is being laid. Whether this results in an immediate breakout or a slow, steady climb, one thing is clear: the Bitcoin network and investor behavior have matured. This time, the bull signal is in the data, not the drama.