Bitcoin’s (BTC) stronghold above the $100,000 mark may be setting the stage for an even more powerful price move, as recent data shows a significant reduction in the coin’s available supply. A tightening supply, combined with a surge in global liquidity, is creating a potentially explosive environment for Bitcoin investors.

Since early 2024, Bitcoin supply on both centralized exchanges and over-the-counter (OTC) desks has dropped dramatically. According to on-chain data from CryptoQuant, exchange reserves have declined by more than 21%, falling from 3.2 million BTC to just 2.5 million BTC. These platforms, popular with retail traders, now hold some of the lowest BTC levels in years.

But it’s not just retail-focused exchanges experiencing the drain. OTC desks, often used by institutions and high-net-worth buyers, have seen an even sharper drop—down 36%, with balances shrinking from over 211,000 BTC to just 135,000 BTC. These supply points are critical for large-volume trades and the movement of institutional capital into crypto.

The sharp drop in available BTC coincided with the introduction of the U.S. spot Bitcoin ETFs, which likely accelerated institutional demand. Analysts believe that a combination of spot ETF inflows, long-term investor holding behavior, and increased corporate treasury involvement is applying upward pressure on Bitcoin’s scarcity.

Although supply reserves can be replenished by sellers or miners, the overall trend remains one of increasing constraint, especially as long-term holders remain reluctant to part with their coins at current levels.

Adding to the bullish setup is a notable rise in global liquidity, a macroeconomic indicator tied to the amount of money circulating in the financial system. According to Jamie Coutts, Chief Crypto Analyst at Real Vision, Bitcoin’s historical performance shows a strong correlation to global liquidity trends.

In a recent post, Coutts explained that for every 1% increase in global liquidity, Bitcoin has historically responded with more than a 20% price movement. He noted that global liquidity rose by 2% in the second quarter of 2025, potentially contributing to Bitcoin’s recent 40% rebound.

Andre Dragosch, Head of Research at Bitwise Asset Management, also backed this view. He highlighted that the global money supply has now reached a three-year high, which could continue to support upward price momentum in the crypto market.

Investor sentiment appears to reflect these fundamentals. On Polymarket, a prediction platform, traders are placing the highest probability—76%—on Bitcoin reaching $120,000 within the year. Other forecasts are similarly optimistic, with 56% betting on $130,000 and 36% expecting $150,000 as possible 2025 targets.

While market conditions can shift rapidly, many analysts view the current environment as favorable for further gains. The combination of tightening supply, rising institutional interest, and supportive macro trends could create the conditions for another leg up in Bitcoin’s price.

Still, experts caution that the market remains dynamic. Any major shifts in macroeconomic policy, unexpected selling pressure from whales or miners, or sudden regulatory news could alter the outlook. However, with current data pointing to ongoing accumulation and strong liquidity inflows, the broader picture remains positive.

As Bitcoin maintains its position above $100,000, eyes are now on the next psychological levels. Whether it’s $120K, $130K, or beyond, the groundwork for a breakout appears to be firmly in place.