According to Binance Research, a range of Bitcoin on-chain indicators suggests a tightening supply and diminished sell pressure. Exchange balances have dropped to a six-year low as approximately 500,000 BTC have departed from trading platforms since the peak during the COVID pandemic.
In a May 17 thread, Binance’s research division highlighted that four key metrics indicate a similar trend: long-term holders are predominant, speculative trading is low, supply on exchanges is reduced, and short-term holders are just starting to recover unrealized profits. This combination of signals, according to Binance Research, implies a shift in Bitcoin’s market dynamics away from forced selling toward a more limited supply situation.
Reasons Behind the Decline in Bitcoin Sell Pressure
The first indicator focuses on Bitcoin supply dormancy. Binance Research noted that nearly 60% of Bitcoin supply has not been moved in over a year, compared to 27% in 2012. The dormant supply peaked at 69.5% in January 2024, coinciding with the approval of U.S. spot Bitcoin ETFs.
“Despite the subsequent sell-the-news response, supply dormancy has remained at historically high levels, indicating sustained conviction among long-term holders,” the firm commented.
The implication for market participants is clear: a significant portion of Bitcoin remains with holders who are reluctant to sell, even following major market developments. While high dormancy does not eliminate downside risks, it can limit the supply available for sell-off during price surges or volatility.
The second metric referenced by Binance Research was the SLRV ratio, which compares activity between shorter-term and longer-term holders. The firm stated that this indicator remains “deep within its historical low range,” suggesting market indifference rather than frantic speculative behavior.
The third and most direct supply signal pertains to exchange balances. Binance Research revealed that the amount of Bitcoin on exchanges has decreased from 17.6% of total supply during the Covid-era peak to 15.0% currently. This represents about 500,000 BTC leaving exchanges, reducing available sell-side supply to a six-year low.
This trend is significant because coins on exchanges tend to be more liquid and available for sale. While a decline doesn’t mean those coins will never return, it does suggest less BTC is actively ready for trading, which could heighten the impact of new demand if selling pressure remains low.
The fourth indicator concerns the profitability of short-term holders. Binance Research observed that the BTC STH MVRV metric had largely stayed below 1.0 since November 2024, indicating a gradual reduction in sell pressure. Now that it has moved above 1.0, it suggests that short-term holders are starting to see unrealized profits again.
“BTC STH MVRV had been below 1.0 for most of the time since November 2024, gradually depleting sell-side pressure—a characteristic typically seen at cycle bottoms,” noted Binance Research. “It has now exceeded 1.0, indicating that short-term holders are beginning to accumulate unrealized gains. Given that this profit accumulation is only just commencing, a significant wave of selling pressure is unlikely to surface soon—a scenario historically associated with sustained recovery periods.”
As of the latest update, BTC is trading at $76,761.
