Binance Has Observed Negative Bitcoin Netflows Recently
As pointed out by an analyst in a CryptoQuant post, the world’s largest crypto exchange by trading volume, Binance, has seen a decline in BTC dumping recently.
The “netflow” is an indicator that tells us about the net amount of Bitcoin entering or exiting wallets of an exchange.
The value of this metric is calculated by simply taking the difference between the inflows and the outflows for the exchange in question.
When the netflow registers a positive value, it means inflows are currently dominating the outflows. Such a trend may be bearish for the price of Bitcoin as holders usually deposit their crypto to exchanges for selling purposes.
On the other hand, positive values of the indicator imply investors are taking out a net amount of coins at the moment. This kind of trend can be bullish for the crypto’s price as it may be a sign of accumulation.
Now, here is a chart that shows the trend in the BTC netflow for the crypto exchange Binance:
As you can see in the above graph, the Binance Bitcoin netflows had been positive during the selloff around the all-time high.
The exchange’s reserve had naturally been rising during this period as coins were being deposited into its wallets.
All this while, the all exchanges reserve had actually been observing a decline, showing much of the selling was occurring only on a few exchanges like Binance.
In recent weeks, however, the Binance Bitcoin netflow has once again turned negative, leading to a slight decline in its reserve.
This would suggest that dumping is weakening on the crypto exchange. Last time such a trend formed was back in July 2021, following which a bull rally kicked off that took the price to its current ATH.