Bitcoin Binance Netflow Turns Negative: What It Means

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Recent on-chain analysis indicates that the outflow of Bitcoin from Binance has become less than inflow, suggesting a potential change in the asset’s price trend. Here’s what this shift might imply for its value.

14-Day SMA Bitcoin Binance Netflow Has Plunged Recently

In a recent analysis by CryptoQuant, they’ve delved into the changing pattern of the 14-day moving average (average trend over 14 days) of the Bitcoin outflow (exchange netflow) on the Binance trading platform.

In this context, “Exchange Netflow” represents a metric that monitors the overall inflow and outflow of cryptocurrencies between wallets linked to a specific centralized exchange, focusing on the net difference (incoming minus outgoing).

When the amount of this metric is more than zero, it signifies that investors are adding a greater number of coins to these platforms collectively. Since one primary motive for coin holders to move their assets to trading exchanges is selling, such a pattern could potentially indicate a downward trend for the asset, also known as a bearish market.

Conversely, if the indicator shows a negative value, it means that withdrawals (outflows) from the exchange are greater than deposits (inflows). This pattern might suggest that investors are stockpiling the coin, which could potentially be a positive sign for its price increase.

Currently, take a look at this graph which illustrates the pattern of Bitcoin Exchange Volume Netflow for Binance and its 14-day Simple Moving Average (SMA) during the past couple of months.

Here’s a chart showcasing the change in Bitcoin trading volume on Binance, along with its 14-day moving average, over the last few months.

Or:

This graph demonstrates the trend of Bitcoin Exchange Netflow for Binance and its 14-day SMA over the past couple of months. It also includes the corresponding 14-day moving average data.

Looking at the graph presented earlier, it appears that there was a significant drop in the flow of Bitcoins going into and out of Binance (Bitcoin Exchange Netflow) over the last 24 hours. This decline suggests that a substantial amount of Bitcoin tokens were taken out by investors from this platform.

Towards the latter part of the previous month, the measure primarily remained within the region where it was above zero, leading to the Simple Moving Average over the past 14 days surpassing the zero mark.

In the graph, the analyst has pointed out where the 14-day Simple Moving Average (SMA) exhibited this trend over the past few months. It seems that this pattern often results in temporary decreases for the asset during this timeframe. Additionally, recent investments into the platform also coincided with a decrease in Bitcoin’s price.

Following a significant drop in the daily flow chart on Binance Exchange, it’s worth noting that the 14-day Simple Moving Average (SMA) has also moved back into the negative range.

When an increase (surge) towards positive values comes before a temporary drop (short-term decline) for an asset, it’s often followed by optimistic market behavior (bullish price action). Conversely, a fall (plunge) into negative values usually precedes bullish movement. At present, Bitcoin seems to be in a favorable position based on this indicator’s pattern.

Overall, a total of 5,407 Bitcoins were withdrawn by exchange users and moved to personal wallets (self-custody) during the recent dip in outflows from the Binance Exchange.

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2025-01-08 16:41