What happened?
Exchange reserve snapshots from Bybit and Gate show traders are fleeing risky crypto and parking funds in stablecoins, with Bybit BTC and ETH holdings falling while USDT balances jumped about 28%. Large transfers from big holders into exchanges were also reported, adding selling pressure. Despite the asset shift, both exchanges report healthy reserve ratios covering user balances.
Who does this affect?
Retail traders are the biggest losers for now — small-holder inflows have collapsed as many move into ETFs or long-term positions instead of trading. Big whales and institutional players are driving price moves by depositing large amounts of BTC to exchanges, amplifying sell pressure. Exchanges themselves appear solvent thanks to strong reserve ratios, but trading desks, long-levered traders, and crypto companies face the brunt of the market stress.
Why does this matter?
The rush into stablecoins and whale selling pushes prices down and raises volatility, already seen as Bitcoin dropped below $108K and total market cap fell. Thin liquidity and high leverage mean forced liquidations can deepen drops and shift price-setting power to a few large players. That makes short-term risk higher, distorts price discovery, and could create both opportunistic buys and continued downside depending on institutional flow and macro signals.