Why Low Exchange Reserves Are Making Bitcoin More Volatile

[tradelikepro]

Bitcoin Inter-Exchange Flow Pulse (IFP). Source: CryptoQuant.

Declining exchange balances have weakened Bitcoin’s “market blood flow.” With fewer coins available for arbitrage and liquidity provision, order books have thinned. Analysts say this makes prices more sensitive, allowing even modest selling to trigger sharp pullbacks instead of scarcity-driven rallies.

[Abdul Khan]

Thin exchange liquidity makes price moves sharper in both directions.

[Nahid Hossen]

Low reserves amplify reactions to even modest buying or selling.

[The_Walking_Dead]

Thin liquidity turns small flows into big moves.

[Capybara_Capybara]

Low exchange balances cut both ways for price.

[Revenant]

Scarcity doesn’t mean stability — it means sensitivity.