Bitcoin Supply Squeeze Weakens as 28,000 BTC Flow Back Onto Exchanges
Bitcoin’s widely discussed supply-squeeze narrative is showing signs of reversing after roughly 28,000 BTC returned to centralized exchanges in less than three weeks, according to data from Santiment.
Exchange balances had fallen by about 33,000 BTC over six weeks, dropping from approximately 1.337 million BTC on June 12 to 1.304 million on July 28, but subsequently rebounded to around 1.332 million BTC by Aug. 16—reversing roughly 84% of the earlier decline. The shift challenges the idea that strong demand from U.S. spot Bitcoin ETFs is rapidly exhausting available Bitcoin supply, since ETF issuers can source BTC through OTC desks, existing holders, and in-kind transfers rather than relying exclusively on coins sitting on exchanges. Institutional demand has also become less consistent: U.S. spot Bitcoin ETFs attracted $853.54 million during the first full week of August, but the five-day inflow streak subsequently ended and included a $61.16 million net outflow on Aug. 12.
The rapid return of Bitcoin to exchanges means more readily tradable supply is available and potentially reduces near-term scarcity pressure. Although exchange deposits do not automatically mean those coins will be sold. As Santiment summarized, the squeeze took six weeks to develop but largely unwound in under three, suggesting Bitcoin’s near-term price trajectory may depend more on whether ETF and broader investor demand can absorb the renewed liquid supply.
Clever Robot News Desk 18th July 2026
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