Bitcoin has observed a recovery surge toward $117,000 as on-chain data shows Binance users have been making consistent withdrawals recently.
Binance Bitcoin Netflow Has Been Negative Recently
As pointed out by CryptoQuant community analyst Maartunn in a Quicktake post, BTC has been flowing out of Binance recently. The on-chain indicator of relevance here is the “Exchange Netflow,” which keeps track of the net amount of Bitcoin that's entering into or exiting out of the wallets connected to a given centralized exchange.
When the value of this metric is positive, it means the inflows are overwhelming the outflows on the platform. Generally, one of the main reasons why investors deposit their coins in exchanges is for selling-related purposes, so this kind of trend can be a bearish sign for the asset's price.
On the other hand, the indicator having a value under zero implies the holders are taking a net number of tokens out of the custody of the exchange. Such a trend may be a sign that the investors are accumulating, which is naturally something that can be bullish for BTC.
Now, here is a chart that shows the trend in the Bitcoin Exchange Netflow for Binance, the largest exchange in terms of trading volume, over the past month:
As displayed in the above graph, the Bitcoin Binance Exchange Netflow has been negative for the last nine days, indicating that investors have constantly been pulling supply out of the platform.
In the same period as these outflows, BTC has seen a recovery run toward the $117,000 level, so it would appear possible that the withdrawals have had a role to play in it. The outflows are also interesting in the context of the two-day Federal Open Market Committee (FOMC) meeting, which kicked off on Tuesday and will conclude on Wednesday with a speech from US Fed Chair Jerome Powell.
“Most analysts expect the Fed to cut rates this week, with prediction markets like Polymarket showing a 92% probability of a rate cut,” notes Maartunn. “The steady outflows from Binance may reflect early positioning ahead of this event.”
It now remains to be seen how the market will react when Powell delivers the Fed decision, and whether the streak of Bitcoin net outflows from Binance will continue.
Bitcoin outflows aren't the only thing that has occurred on Binance ahead of the FOMC meeting. As CryptoQuant author Darkfrost has pointed out in a Quicktake post, the exchange has also seen massive stablecoin inflows.
From the chart, it's visible that Binance has seen a large stablecoin netflow spike corresponding to the deposit of nearly $2 billion worth of stablecoins. Investors transfer their fiat-tied tokens to exchanges when they want to buy into an asset like Bitcoin, so this could be another indication of investors repositioning in anticipation of the Fed decision.
BTC Price
At the time of writing, Bitcoin is trading around $116,400, up around 3.6% over the last week.
