A recent report from CryptoQuant reveals that the reserves of Bitcoin on exchanges have dropped to the lowest levels seen since the start of 2021, suggesting a notable shift in the dynamics of the cryptocurrency market. Last month, more than 90,700 bitcoins were withdrawn from major exchanges, indicating a decrease in Bitcoin's liquid supply as investors opt to transfer their coins to cold wallets for long-term holding.

This trend of moving Bitcoin from exchanges to cold wallets has been observed for several years and is influenced by factors like the increasing price of BTC, the approval of spot Bitcoin ETFs, and the excitement surrounding the BTC halving event. The report indicates that in July 2021, Bitcoin exchange reserves stood at approximately 2.8 million, showing a decrease of about 900,000 coins since CryptoQuant started tracking this data.

Conversely, data from Glassnode suggests a notable transfer of bitcoin from long-term wallets to short-term wallets, indicating a narrowing gap between these two types of wallets. As prices climb and investors see higher unrealized profits, long-term wallets are more inclined to sell their holdings. Short-term wallet supply has increased by around 1.12 million BTC, absorbing the selling pressure from long-term wallets.

It's important to note that this information should not be considered as investment advice.