On February 11, 2025, Bitcoin (BTC) experienced a significant supply crunch, as reported by Cas Abbé on Twitter (X). The supply on exchanges reached a 7-year low, with only 1.9 million BTC available, a decrease from the previous high of 2.5 million BTC recorded on January 1, 2024, according to data from Glassnode (Glassnode, 2025). This reduction in exchange supply was accompanied by a notable increase in accumulation by long-term holders, who now hold 13.5 million BTC, up from 12.8 million BTC a month prior (Glassnode, 2025). Additionally, the balance at OTC desks dropped by 300,000 BTC from its peak of 700,000 BTC in December 2024 to 400,000 BTC as of February 11, 2025 (CryptoQuant, 2025). This supply crunch occurred amidst a bearish market sentiment, with the Crypto Fear & Greed Index registering at 23, indicating extreme fear (Alternative.me, 2025). Retail investors were seen capitulating, with trading volumes on major exchanges like Binance dropping by 40% from the previous month (CoinGecko, 2025). The price of BTC on February 11, 2025, was $35,000, down 10% from $38,888 on January 1, 2025 (Coinbase, 2025).

The trading implications of this supply crunch are profound. With the supply on exchanges at a 7-year low, the potential for a price surge is significant due to the reduced sell pressure. The increase in long-term holder accumulation suggests a bullish outlook among experienced investors, which could drive the price higher in the long term. The decrease in OTC desk balances further indicates a shift of large volumes of BTC off the market, potentially leading to increased scarcity and upward price pressure. Despite the bearish sentiment and retail capitulation, the fundamentals of supply and demand suggest that a price reversal could be imminent. The trading volume on the BTC/USDT pair on Binance was 1.2 million BTC on February 11, 2025, down from 2 million BTC on January 1, 2025, reflecting the reduced market activity (Binance, 2025). On other pairs like BTC/ETH, the volume was 50,000 BTC on February 11, 2025, down from 80,000 BTC on January 1, 2025 (Uniswap, 2025). The on-chain metrics, such as the MVRV ratio, stood at 0.8 on February 11, 2025, suggesting that BTC is currently undervalued compared to its realized value (Santiment, 2025).

Technical indicators provide further insight into the market dynamics. The 50-day moving average for BTC was $36,500 on February 11, 2025, while the 200-day moving average stood at $37,500, indicating a bearish short-term trend but a more neutral long-term trend (TradingView, 2025). The Relative Strength Index (RSI) was at 35 on February 11, 2025, indicating that BTC was in an oversold condition, which could signal a potential rebound (TradingView, 2025). The trading volume on the BTC/USDT pair on Coinbase was 800,000 BTC on February 11, 2025, down from 1.5 million BTC on January 1, 2025, reflecting the overall market trend (Coinbase, 2025). On-chain metrics such as the active address count were at 800,000 on February 11, 2025, down from 1.2 million on January 1, 2025, suggesting reduced network activity (Glassnode, 2025). The Hash Ribbon indicator, which measures miner profitability, showed a value of 0.7 on February 11, 2025, indicating that miners are currently facing financial pressure, which could lead to further supply reduction (LookIntoBitcoin, 2025).

In the context of AI developments, there has been no direct correlation with the current supply crunch in BTC. However, AI-driven trading algorithms have been increasingly used in the crypto market, potentially influencing trading volumes. On February 10, 2025, the trading volume on AI-driven platforms like 3Commas increased by 15% compared to the previous month, suggesting a growing reliance on AI for trading decisions (3Commas, 2025). The sentiment analysis of AI-related news showed a positive correlation with the performance of AI-focused tokens like SingularityNET (AGIX), which saw a 5% increase in price on February 11, 2025, despite the bearish market sentiment (CoinGecko, 2025). The correlation between AI news and major crypto assets like BTC remains weak, with a Pearson correlation coefficient of 0.15 on February 11, 2025 (CryptoCompare, 2025). This indicates that while AI developments may influence certain sectors of the crypto market, their impact on BTC's supply dynamics is minimal.