• Bitcoin: By May–July 2026, roughly 5.6% of the total BTC supply remained on known exchange wallets, the lowest ratio since 2018 . In absolute terms, total BTC reserves on exchanges fell to approximately 2.21–2.67 million coins, a seven-year low .
• Ethereum: By June 2026, ETH on exchanges had declined to a record low of 14.5 million ETH — about 8.7% of circulating supply — down 43% from mid-2025 levels .

Santiment noted in July 2026 that both assets were showing "one of crypto's most encouraging signals for the long term: coins are staying off exchanges" .

Why Are Coins Leaving Exchanges?

Analysts point to three dominant forces pulling coins off exchange order books and into long-term storage.

Institutional accumulation. The number of wallets holding 100 BTC or more reached 20,229 in May 2026, an 11.2% year-over-year increase . Institutions accumulated 81,200 BTC in a single month earlier in 2026, absorbing roughly six times the newly mined supply during that period . ETF custodians now hold about 1.3 million BTC, or roughly 6.7% of circulating supply .

Self-custody trend. Long-term holders controlled over 73.77% of Bitcoin's total supply as of May 1, 2026, approaching the historic peak range of prior cycles . The total number of Bitcoin wallets with a non-zero balance reached an all-time high of 58.45 million addresses . The self-custody movement, accelerated by the 2022 FTX collapse, has reshaped holder behavior, with hardware wallet adoption reaching new highs .

Corporate and ETF treasury outflows. The steepest leg of the Ethereum exchange drain started around July 2025, coinciding with corporate treasuries such as BitMine and SharpLink pulling ETH into staking and long-term balance sheets .

The Impact on Liquid Supply

With coins moving off exchanges, the "liquid" supply available for immediate trading fell to multi-year lows. Santiment and other analysts characterized this as a supply squeeze that historically has preceded sharp upward price moves—but only once market sentiment turns bullish . The exchange outflow pace accelerated even during price declines. For example, in February 2026, exchange outflows rose by approximately 14,200 BTC in a single week (worth roughly $958 million) even as BTC's price fell .

The Central Contradiction: Supply Squeeze Meets Macro Crash

Despite the tightening on-chain picture, prices fell sharply:

• Bitcoin hit an all-time high near ~$126,000 in October 2025, then dropped roughly 47–53% to the low $60,000s by February–June 2026 . BTC briefly cracked $60,000 on June 5, 2026, trading as low as $59,099—its weakest level since October 2024 .
• Ethereum traded near the mid-$1,700s during this period, roughly 44% down on the year .

Santiment and other analysts described this as the "Fear & Greed Paradox" : the exchange supply drain, institutional accumulation, and record long-term holder share were historically bullish structural signals, but macroeconomic shocks overwhelmed that supply-side support.

Key macro headwinds included:

• Risk-off sentiment triggered by President Trump's announcement of new 15% global tariffs in February 2026, driving a broad sell-off in tech and risk assets .
• ETF outflows during late 2025 and early 2026, reversing the inflows that had propelled the October 2025 peak .
• Strategy (formerly MicroStrategy) liquidating a portion of its Bitcoin holdings in June 2026, adding sell pressure .
• Persistent market fear with sentiment at "Extreme Fear" levels on the Crypto Fear & Greed Index for much of 2026 .

What Santiment Says About the Outlook

Santiment's June 2026 weekly summary noted that network realized profit/loss still looked healthy—holders were not yet capitulating into deep losses—which the team read as a constructive secondary signal . However, they flagged a rare jump in Bitcoin supply moving back onto exchanges in early June 2026, a pattern that "often precedes further selling" . The firm treated stabilization of exchange inflows as an early relief signal for a potential recovery.

• Bitcoin: By May–July 2026, roughly 5.6% of the total BTC supply remained on known exchange wallets, the lowest ratio since 2018 . In absolute terms, total BTC reserves on exchanges fell to approximately 2.21–2.67 million coins, a seven-year low .
• Ethereum: By June 2026, ETH on exchanges had declined to a record low of 14.5 million ETH — about 8.7% of circulating supply — down 43% from mid-2025 levels .

Santiment noted in July 2026 that both assets were showing "one of crypto's most encouraging signals for the long term: coins are staying off exchanges" .

Why Are Coins Leaving Exchanges?

Analysts point to three dominant forces pulling coins off exchange order books and into long-term storage.

Institutional accumulation. The number of wallets holding 100 BTC or more reached 20,229 in May 2026, an 11.2% year-over-year increase . Institutions accumulated 81,200 BTC in a single month earlier in 2026, absorbing roughly six times the newly mined supply during that period . ETF custodians now hold about 1.3 million BTC, or roughly 6.7% of circulating supply .

Self-custody trend. Long-term holders controlled over 73.77% of Bitcoin's total supply as of May 1, 2026, approaching the historic peak range of prior cycles . The total number of Bitcoin wallets with a non-zero balance reached an all-time high of 58.45 million addresses . The self-custody movement, accelerated by the 2022 FTX collapse, has reshaped holder behavior, with hardware wallet adoption reaching new highs .

Corporate and ETF treasury outflows. The steepest leg of the Ethereum exchange drain started around July 2025, coinciding with corporate treasuries such as BitMine and SharpLink pulling ETH into staking and long-term balance sheets .

The Impact on Liquid Supply

With coins moving off exchanges, the "liquid" supply available for immediate trading fell to multi-year lows. Santiment and other analysts characterized this as a supply squeeze that historically has preceded sharp upward price moves—but only once market sentiment turns bullish . The exchange outflow pace accelerated even during price declines. For example, in February 2026, exchange outflows rose by approximately 14,200 BTC in a single week (worth roughly $958 million) even as BTC's price fell .

The Central Contradiction: Supply Squeeze Meets Macro Crash

Despite the tightening on-chain picture, prices fell sharply:

• Bitcoin hit an all-time high near ~$126,000 in October 2025, then dropped roughly 47–53% to the low $60,000s by February–June 2026 . BTC briefly cracked $60,000 on June 5, 2026, trading as low as $59,099—its weakest level since October 2024 .
• Ethereum traded near the mid-$1,700s during this period, roughly 44% down on the year .

Santiment and other analysts described this as the "Fear & Greed Paradox" : the exchange supply drain, institutional accumulation, and record long-term holder share were historically bullish structural signals, but macroeconomic shocks overwhelmed that supply-side support.

Key macro headwinds included:

• Risk-off sentiment triggered by President Trump's announcement of new 15% global tariffs in February 2026, driving a broad sell-off in tech and risk assets .
• ETF outflows during late 2025 and early 2026, reversing the inflows that had propelled the October 2025 peak .
• Strategy (formerly MicroStrategy) liquidating a portion of its Bitcoin holdings in June 2026, adding sell pressure .
• Persistent market fear with sentiment at "Extreme Fear" levels on the Crypto Fear & Greed Index for much of 2026 .

What Santiment Says About the Outlook

Santiment's June 2026 weekly summary noted that network realized profit/loss still looked healthy—holders were not yet capitulating into deep losses—which the team read as a constructive secondary signal . However, they flagged a rare jump in Bitcoin supply moving back onto exchanges in early June 2026, a pattern that "often precedes further selling" . The firm treated stabilization of exchange inflows as an early relief signal for a potential recovery.