Bitcoin balances held on cryptocurrency exchanges have recovered most of their recent decline, while BTC approaches the $64,900 cost basis tracked by on-chain traders.

Exchange supply recovered about 28,000 BTC by August 16, reversing 84% of the earlier decline, according to Santiment. The rebound comes as Glassnode data shows BTC has underperformed the S&P 500 across most trading days over the past three months — the longest such streak in six years — and as Bitcoin trades within $1,000 of the $64,900 on-chain trader cost basis, with $65,000 emerging as a key resistance level.

Exchange Supply Reverses Six-Week Decline

Santiment said exchange supply reached about 1.332 million BTC on August 16, reversing roughly 84% of the coins removed from exchanges between June 12 and July 28.

According to the on-chain analytics firm, Bitcoin exchange balances fell from about 1.337 million BTC on June 12 to roughly 1.304 million BTC on July 28, a decline of approximately 33,000 BTC. Balances then increased by around 28,000 BTC through August 16. That leaves exchange supply about 5,200 BTC below the June peak.

Exchange balances are among the most closely watched on-chain metrics because coins moved onto trading platforms are generally viewed as closer to potential sale, while withdrawals are often read as a shift toward self-custody.

Notably, Santiment said the refill has flattened over the past few days. The earlier supply decline took six weeks to build, while the reversal happened in less than three weeks.

Santiment also explained how exchange balances can rise alongside strong ETF inflows. According to the firm, ETF creations can use OTC desks and existing holders. Therefore, ETF inflows do not always remove coins from visible exchange wallets. The distinction matters because US spot Bitcoin ETFs, launched in January 2024, have become a major channel for Bitcoin exposure, and their creation mechanics shape how on-chain supply data is interpreted.

Bitcoin Trails Stocks Over Three Months

The exchange data comes as Bitcoin's relative performance against stocks has weakened. Glassnode said BTC outperformed the stock market on the latest trading day. However, the firm found that BTC outperformed the S&P 500 on only about one-third of trading days over the previous three months.

That stretch represents Bitcoin's longest such underperformance streak across its six-year history, according to Glassnode. The firm questioned whether the latest outperformance would continue or remain limited. The observation places Bitcoin's recent market performance alongside the changes in exchange supply.

Bitcoin's performance against equities is widely tracked as a gauge of whether the cryptocurrency is trading like a risk asset, which makes prolonged underperformance streaks versus the S&P 500 notable for analysts.

BTC Approaches $64,900 Cost Basis

Meanwhile, analyst Darkfost highlighted another level traders are watching. BTC is slowly approaching the cost basis for on-chain traders, a group that includes short-term holders with one million to three million days of age. Their cost basis currently sits at $64,900.

In on-chain analysis, a cost basis marks the average acquisition price of a coin cohort, and levels where large groups sit near breakeven draw attention because those holders often trade around their entry price.

Darkfost said Bitcoin is within $1,000 of testing that level. According to the analyst, these investors frequently trade in and out of the spot market. For now, $64,900 continues to act as resistance.

He also noted that significant confluence is around $65,000. Darkfost added that Bitcoin may not break above that level durably on its first attempt. That leaves the $65,000 confluence, the flattened exchange refill, and BTC's relative performance versus stocks as the main markers on-chain watchers are tracking.