On-chain data shows a net amount of Bitcoin has been flowing into Binance for 10 days now, a potential sign that investors are looking to sell.
Bitcoin Exchange Netflow Remained Positive for Binance Recently
As CryptoQuant author Darkfrost pointed out in an article, investors have recently been depositing their Bitcoin on Binance. The relevant on-chain metric here is “Exchange Netflow,” which tracks the total amount of BTC currently flowing into or out of wallets connected to a centralized exchange.
When the value of the metric is positive, it means that holders are transferring a net number of tokens to the platform. Since one of the main reasons why investors deposit on exchanges for the purpose of selling, this type of trend can have a bearish implication on the price of the asset.
On the other hand, the fact that the indicator is below zero suggests that withdrawals dominate deposits on the stock market. Such a trend may be a sign that investors are accumulating, which can naturally be bullish for BTC. Now here is the chart shared by Darkfrost that shows the Bitcoin Exchange Netflow trend for Binance, the largest platform in terms of trading volume, over the last ten days:
As seen in the chart above, Binance Bitcoin Exchange’s net flow remained at a positive level throughout this window, implying net inflows. The scale of inflows has varied each day, but there has been an overall increase in the amount of BTC deposited on the exchange over the past 10 days.
Specifically, on May 16, a net 378 BTC entered Binance-associated wallets, while today the same figure increased to 1,190 BTC. This means that incoming flows more than tripled over the period. “The biggest day recorded over 3,600 BTC on May 18, a relatively high level for a single day that clearly illustrates the intensity of the movement,” the analyst noted.
Sustained deposits mean that Binance’s exchange reserve (i.e. the total amount of Bitcoin stored on the platform) has been on an upward trend recently.
From the chart, it is clear that the Bitcoin exchange reserve on Binance reached a low of 616,000 BTC on April 24. The metric has since climbed to 632,000 BTC, suggesting a net inflow of 16,000 BTC into the exchange. “When inflows become dominant and consistent on a platform like Binance, this is traditionally interpreted as a potential sell signal,” Darkfrost said.
BTC Price
At the time of writing, Bitcoin is trading around $77,400, the same level as a week ago.
