Bitcoin exchange inflows, a key indicator of near-term trading intentions, have fallen from a daily average of 58,600 BTC in December to 26,900 BTC, representing a 54% decrease in the number of bitcoins sent to exchanges, a contraction in market liquidity, and heightened investor caution. In addition, a working capital indicator that reflects the current market structure is Bitcoin's "hot supply", or the number of bitcoins flowing each week, which data show has shrunk from 5.9% of total circulating supply to just 2.8% after peaking in December 2024. The drop of more than 50% highlights the general decline in short-term trading activity and market participation, indicating that speculative capital is retreating.
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