Bitcoin (BTC) Price: The Supply Squeeze That Could Send BTC to New Heights

TLDR

Table of Contents

Bitcoin price declined to $103,200 but is now consolidating above $105,000 with resistance at $106,000
Bitcoin exchange reserves hit an all-time low of 2.5 million BTC, the lowest level on record
Institutional accumulation continues with MicroStrategy adding 7,390 BTC in May to reach 576,230 BTC total
Spot Bitcoin ETFs recorded $5.23 billion in inflows over the past month
Technical indicators show mixed signals with RSI at neutral 52 and MACD turning slightly bearish

Bitcoin price recently tested the $103,200 support level after declining from highs above $110,500. The cryptocurrency is now trading above $105,000 and showing signs of consolidation.

The price movement comes as Bitcoin exchange reserves have fallen to their lowest level on record. According to CryptoQuant data, centralized exchanges now hold just under 2.5 million BTC as of late May 2025.

Bitcoin is currently trading above the 100 hourly simple moving average. Immediate resistance sits at $105,550 with a bearish trend line forming at the same level.

The first key resistance zone is located near $106,000. If Bitcoin breaks above this level, the next target would be $106,800, which aligns with the 50% Fibonacci retracement level.

Institutional Accumulation Drives Supply Shortage

MicroStrategy expanded its Bitcoin holdings by 7,390 BTC during May 2025. The company now holds 576,230 BTC, representing approximately 2.75% of total Bitcoin supply.

Strategy has acquired 4,020 BTC for ~$427.1 million at ~$106,237 per bitcoin and has achieved BTC Yield of 16.8% YTD 2025. As of 5/25/2025, we hodl 580,250 $BTC acquired for ~$40.61 billion at ~$69,979 per bitcoin. $MSTR $STRK $STRF https://t.co/1dVUg1uPJs
— Strategy (@Strategy) May 26, 2025

The average purchase price for MicroStrategy’s Bitcoin holdings stands at $69,726. Other public companies including GameStop and Japan-based Metaplanet have also been adding to their positions.

Large wallet holders with between 1,000 and 10,000 BTC continue accumulating. Much of this Bitcoin is being moved to cold storage rather than remaining on exchanges.

Spot Bitcoin exchange-traded funds attracted $5.23 billion in inflows over the past month according to SoSoValue data. This institutional demand has contributed to the supply squeeze on exchanges.

Several governments are also increasing their Bitcoin exposure. The UAE and Pakistan have stepped up accumulation efforts while U.S. lawmakers discuss creating a national Bitcoin reserve.

Technical Outlook Shows Mixed Signals

The relative strength index currently reads 52, indicating neutral momentum. The moving average convergence divergence indicator has turned slightly bearish in the short term.

Bitcoin remains well above both the 200-day exponential moving average and simple moving average. Both longer-term indicators maintain upward trends.

Short-term moving averages suggest some downward pressure around the $106,000 level. A recovery above this resistance could target $110,000 or higher.

If Bitcoin fails to hold current support levels, a decline toward $104,200 is possible. The next major support sits at $103,200 where the recent low was established.

A break below $103,200 could send Bitcoin toward $102,500 support. The main support level is located at $101,200, below which bearish momentum could accelerate.

The current low exchange reserves create conditions for increased volatility. Limited supply on exchanges historically leads to sharper price movements in both directions when demand shifts occur.

Bitcoin exchange reserves have been declining steadily while prices reached new all-time highs above $111,500 earlier this year.

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