In glad tidings for an orange Christmas, Bitcoin (BTC) supply is drying up to lows not seen for years. In a recent tweet by CryptoRank, simply 6.iii% of the total Bitcoin supply, or 1.3 million BTC, is held on cryptocurrency exchanges.

The decreasing supply is nothing new, trending down since the Bitcoin halving in 2022 when the BTC cake advantage was cutting in two. BTC availability on exchanges followed conform, slowly trending down over the past year. Exchange wallets deemed for ix.5% of the BTC supply in October 2022, just before the 2022 Christmas all-time highs, and 7.three% in July this year. The 6.3% December effigy is the everyman recorded in 2022.

Interestingly, Coinbase's BTC wallet dominance is besides slipping. The American exchange used to custody more BTC than all other exchanges combined. Its authority has slipped from 50.52% to 40.65% over the past year.

The news follows a swathe of positive price metrics that dovetail the upwards toll activeness of Bitcoin. Firstly, the illiquid BTC supply has iced over for the winter every bit the BTC supply going from a "liquid" to an "illiquid" country is now 100,000 BTC per month. In essence, more than BTC is locked away into cold storage than the amount being mined.

Glassnode, the on-concatenation analytics company, shared further bullish news regarding exchange behavior. The seven-day moving boilerplate for BTC'due south substitution inflow volume just reached a five-month low of 978.452 BTC and has been trending down week on week. The commutation supply shortage may continue with less and less BTC sent to exchanges.

Furthermore, information technology's important to note that many retail investors and some companies store their BTC on exchanges, indicating that the "illiquid" BTC may be even lower. Some BTC hodlers would leave the custody of their keys to exchanges instead of taking their BTC offline into cold storage.

Related: Bitcoin needs to clear $51K to reduce the chance of new sell-off from BTC whales

Unsurprisingly, Binance CEO and co-founder Changpeng Zhao has encouraged the hot wallet practice, despite the all-time efforts of Bitcoiners like Andreas Antonopolous ensuring "not your keys, not your Bitcoin" is part of everyday BTC mantra.

As a result, while i.3 million BTC rests on exchanges, they may non be "circulating," and may, in fact, contribute to the illiquid supply.

Even so, despite calls for a "Santa Rally" off the back of bullish analytics, the bears are non yet out of the woods. A tweet by BullRun Invest using Glassnode data shows that 24.half dozen% of all BTC supply is sitting above the price of $47,000.

It suggests that roughly a quarter of the BTC bought at those toll levels are currently underwater. If BTC fails to brand progress into the 50s, at that place may be fewer presents under the tree tomorrow.