Bitcoin exchange reserves hit a new low, Tether issues an additional 1 billion USDT to "replenish ammunition"

In early November 2025, data from the cryptocurrency analysis platform CryptoQuant showed that Bitcoin exchange reserves dropped to historic lows, indicating tight supply and decreased trading availability. Analysts interpret this as a potential signal of supply shocks.

Meanwhile, Tether issued an additional 1 billion USDT, and over the past month, Tether and Circle jointly issued a total of 11.75 billion USD in stablecoins, injecting new liquidity into the market. On-chain indicators reveal that Bitcoin spot demand over the weekend experienced its first sustained expansion since early October, while Ethereum saw increased large orders around the $3,200 level, suggesting whale reaccumulation. These factors collectively point to a market environment shift, where limited supply combined with new liquidity could drive Bitcoin’s short-term price movements.

Bitcoin Exchange Reserves Decline and Supply Dynamics

Bitcoin is undergoing a significant supply tightening phase. CryptoQuant data shows that Bitcoin held on exchange wallets has fallen to its lowest point in history, with this trend accelerating since September 2025. A decline in exchange reserves is generally interpreted as a bullish signal because it reduces immediate selling pressure and indicates investors are moving assets into long-term storage solutions such as hardware wallets or custodial services.

Mechanically, when Bitcoin leaves exchanges, its role as liquid supply diminishes—making it less available for quick sale and increasing its actual scarcity.

CryptoQuant’s Head of Research, Julio Moreno, specifically noted: “Weekend Bitcoin spot demand surged, marking the first sustained expansion since early October.” This pattern aligns with historical trends where, during early bull phases, exchange reserves typically decline by 15-20%, followed by rapid price increases. Current data also shows that addresses holding Bitcoin for over a year have increased to 68%, a new all-time high, further confirming strengthened long-term holding conviction.

Stablecoin Issuance and Liquidity Injection

Complementing the tightening Bitcoin supply is the large-scale issuance of stablecoins. Lookonchain reports that Tether issued an additional 1 billion USDT, and over the past month, Tether and Circle together issued 11.75 billion USD in stablecoins.

This issuance is significant because stablecoins often serve as the “cash reserve” within the crypto ecosystem. An increase in supply suggests a potential rise in purchasing power reserves. Historically, there is a correlation of 0.78 between USDT market cap expansion and Bitcoin price movements. When monthly net issuance exceeds 5 billion USD, Bitcoin’s average return over the following 30 days is about 18%.

The current 11.75 billion USD monthly issuance is twice the peak level seen in 2024, indicating institutional-level capital deployment readiness. Analysts compare this combination—Bitcoin supply tightening and stablecoin liquidity injection—to “rocket fuel,” as assets with limited supply encountering growing purchasing power often lead to price revaluation. Notably, about 60% of the issued stablecoins flow to the Ethereum chain, with 35% to Tron, potentially signaling the upcoming altcoin season.

On-Chain Signals and Market Data Overview

• Exchange Reserves: Historic lows
• Stablecoin Monthly Issuance: 11.75 billion USD (Tether + Circle)
• Latest Issuance: 1 billion USDT (Tether)
• Bitcoin Demand: Weekend spot demand expansion (first since early October)
• Ethereum Accumulation: Large order sizes increasing around $3,200
• Structural Support: Ethereum in the $3,000–$3,400 range

Institutional Behavior and Market Structure Shifts

On-chain data reveal significant changes in institutional investor behavior, especially in the Ethereum market. Analyst Shayan pointed out: “Spot order size data indicates renewed interest from large investors in Ethereum. When ETH drops to $3,200, spot order sizes increase, a typical whale activity pattern.”

This pattern has been observed in previous cycles during accumulation phases, where large market participants build positions at discounted prices, while retail traders remain cautious. Derivatives market data shows Ethereum futures open interest remains stable during price declines, suggesting institutions prefer building positions via spot rather than leverage.

Ethereum now has structural support in the $3,000–$3,400 zone, which could lay the groundwork for a low-volatility phase before potentially entering a higher volatility stage. Such conditions often lead to accumulation phases, as seen at the end of 2023 and early 2024, followed by significant rallies. The coordinated accumulation of Bitcoin and Ethereum, along with stablecoin liquidity injection, creates a rare bullish combination.

Macro Context and Risk Considerations

These on-chain dynamics should be viewed within a broader macroeconomic context. The Federal Reserve’s 25 basis point rate cut in October initiated an easing cycle, prompting investors to seek higher-yield assets. Additionally, the U.S. government shutdown is nearing resolution, expected to release between 25 and 35 billion USD of frozen liquidity. This environment favors scarce assets like Bitcoin, but risks remain.

On one hand, extremely low exchange reserves could amplify market volatility—when sellers are scarce, even moderate buy orders can push prices sharply higher. Conversely, unexpected negative news could trigger sharp declines due to limited liquidity.

On the other hand, stablecoin issuance provides potential purchasing power, but if these funds are not deployed into crypto assets, their impact remains limited. Investors should also monitor regulatory developments, especially U.S. Treasury sanctions on mixers and the implementation of the EU’s MiCA framework, which could influence market sentiment. It is advisable to combine these on-chain signals with traditional technical analysis and macro policy calendars for a more comprehensive market outlook.

Conclusion

Bitcoin’s exchange reserves hitting all-time lows combined with large-scale stablecoin issuance paint a bullish picture of supply tightening and liquidity injection. Weekend demand expansion and institutional accumulation patterns further reinforce this narrative. Such an environment often precedes significant price movements, but investors should remain cautious of the amplifying effects of low liquidity and macroeconomic uncertainties. On-chain indicators and market structure shifts suggest that cryptocurrencies may be at the start of a new capital rotation cycle, with Bitcoin and Ethereum poised to lead the next phase of market development.