Bitcoin and Ethereum exchange reserves have reached historic lows, signaling a tightening supply that could lead to increased market volatility. Bitcoin exchange balances hit an all-time low as institutions and countries accumulate reserves, while Ethereum's exchange supply has fallen to its lowest level in seven years, with approximately 1 million ETH withdrawn from centralized exchanges in May alone. Despite this, much of Ethereum's supply remains off exchanges, held in Layer 2 solutions, staking, liquid staking derivatives, and smart contracts. Bitcoin's price recently peaked at $111,880 before experiencing an 8% pullback amid rising profit-taking activity, with realized profits surging to over $500 million per hour at times. Data indicates a shift in investor behavior: while whales with 1,000 to 10,000 BTC have been reducing holdings, mid-sized holders are increasing their positions. Retail demand for Bitcoin has declined by about 2.45% over the past 30 days, reflecting cautious sentiment among smaller investors. On-chain metrics show fewer momentum buyers and a rise in profit takers, suggesting traders are locking in gains. Long-term Bitcoin holders continue to accumulate, adding nearly 40,000 BTC recently, which may contribute to reduced price volatility. Meanwhile, Bitcoin options open interest has reached $50 billion, indicating heightened derivative market activity and potential for increased volatility ahead.