- Bitcoin exchange reserves increase in the first time in six weeks indicating that investors are transferring coins to exchanges as the markets are uncertain.
- Miner reserves decline to lowest since mid-2025, which is evidence of operational selling because energy subsidies and tax credits are still suspended.
- Exchange outflows of stablecoins hit all-time highest levels, indicating transaction shifts of risk assets into safety and dollar-pegged liquidity.
As the U.S. government closure moves into its second month, the liquidity of bitcoin is fading away, impacting market activity and investor positioning. On-chain metrics show that capital is leaving risk assets as fiscal disruption continues to escalate.
Exchange Inflows Signal Defensive Moves
Data from CryptoQuant reveals that reserve levels at exchanges for Bitcoin have increased for the first time in six weeks. This move can be interpreted as investors are moving coins to exchanges to prepare for profit taking or decrease risk. An increase in reserves generally means that traders are preparing for potential volatility in the price of the assets.
Simultaneously, withdrawal levels of stablecoins from exchanges have increased to the highest levels on record. This indicates a flight to dollar-pegged assets as traders find a safer place to store value. In summary, liquidity is being pulled from open markets and is being consolidated in defensive positions.
Miner Reserves Fall Amid Operational Pressure
Reserves of Bitcoin miners are at their lowest since mid-2025. The sellers of BTC are miners who need to pay operation expenses since energy subsidies and tax credits are not being provided during the shutdown. This creates additional selling pressure despite broader market caution.
The decline in miner holdings occurs alongside rising exchange inflows, creating uneven supply dynamics. Operational necessities are forcing selective selling, while investors reduce risk, further tightening available market liquidity.
What’s Next for Bitcoin Liquidity?
Investor sentiment remains low, with the Fear & Greed Index in “Extreme Fear,” echoing levels during the 2023 banking liquidity crisis. Traders continue prioritizing stability over exposure.
The Congressional Budget Office warns the shutdown could reduce U.S. GDP growth by 1–2% in Q4 2025, erasing $7–14 billion in economic output. While a rebound is expected once the shutdown ends, on-chain data indicates liquidity recovery may take longer, requiring patience from investors and traders.
