Bitcoin has performed strongly below expectations in October, with total monthly gains now estimated at around 1.54%. Following a bullish start, which established a new all-time high at $126,000, the premier cryptocurrency experienced a heavy correction mid-month, resulting in present price levels around $111,400. Amid these developments, crypto analyst Amr Taha has noted a recent shift on the Binance network, with potentially bullish implications for market participants.
Exchange Reserves Near Critical Low
In a recent QuickTake post on CryptoQuant, Amr Taha shares insights into Bitcoin’s possible near-term trajectory, using data from the Bitcoin Exchange Reserve on Binance. As the name implies, this metric is an on-chain indicator that tracks the total amount of Bitcoin held in exchange wallets over time.
The exchange reserve is an important measure of investors’ sentiment, as a high figure suggests preparation to sell and a growing lack of conviction among investors. However, when investors withdraw large amounts of their holdings from exchanges, especially within a short period, it indicates confidence in the asset’s prospects for price appreciation.
Taha points out that the Bitcoin exchange reserves on Binance have seen a significant decline, with the current reading approaching 610,000 BTC, a level last reached in July, and also one of the lowest levels seen last year. While Bitcoin’s exchange reserves have steadily declined throughout 2025, the analyst remarks that the most recent decline looks “extremely aggressive,” implicitly suggesting the possibility of an imminent radical change.
One possible effect of this drastic drop in exchange reserve is a supply shock, i.e., a sudden drop in the available supply of an asset. This abrupt shrinkage in selling supply also increases the market’s fragility to the upside, with increasing demand serving as fuel to bolster major upswings.
Factors Behind Bitcoin’s Falling Exchange Reserve
Interestingly, Taha explains that as Bitcoin’s price swings around the $111,500 level, it reflects an underlying amount of demand, thus reinforcing earlier conjectures on growing long-term holders (LTH) confidence. As a result, Bitcoin could soon see an influx of momentum to push its price to the upside.
Aside from growing institutional and whale accumulation standing as the primary driver of declining reserves, the analyst also points out the immense demand from the spot ETFs as another factor in play. A proportion of BTC typically gets pulled into these funds, thereby competing with the supply of Bitcoin available in the market.
At the time of writing, Bitcoin is worth approximately $111,613, reflecting no significant movement in the past day.
