Bitcoin Reserve On Binance Sharply Rises, Whales Preparing For More Dumping?

Keshav Verma

1 year ago

3 mins read

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On-chain data shows the Bitcoin reserve on Binance has been sharply going up in the last couple of days, something that could be a sign of dumping.

Bitcoin Reserve On The Crypto Exchange Binance Has Observed Sharp Growth In Recent Days

As pointed out by an analyst in a CryptoQuant post, the funding rates have been negative while these inflows have been made.

The “exchange reserve” is an indicator that measures the total amount of Bitcoin currently stored in the wallets of a centralized exchange (which, in this case, is Binance).

When the value of this metric goes up, it means investors are depositing their coins to the exchange right now. As investors could be depositing to such a platform for selling purposes, this kind of trend can have bearish impacts on the price of the crypto.

On the other hand, decreasing value of the reserve suggests coins are exiting the exchange currently. Such a trend, when sustained, can be a sign of accumulation from investors, and could thus be bullish for the BTC value.

Now, here is a chart that shows the trend in the Bitcoin exchange reserve for the crypto exchange Binance during the past month:

The value of the metric seems to have been riding an upwards momentum in recent days | Source: CryptoQuant

As you can see in the above graph, the Binance Bitcoin exchange reserve started to rapidly fall down around ten days ago as the crash started.

This happened because the collapse of FTX made investors more wary of crypto exchanges than ever before, and so they were withdrawing coins off centralized platforms in hordes.

After seeing a final sharp plunge a little less than a week ago, the indicator started moving sideways. In the past couple of days, however, this trend has changed.

The Binance Bitcoin exchange reserves are now climbing back up quickly, suggesting that investors have been depositing large amounts.

This could be a sign of activity from whales, and would imply that these humongous holders may be preparing to dump.

The quant has also talked about another indicator’s trend, the “Funding Rate,” which tells us whether the futures market is leaning towards shorts or longs right now. The below chart displays the trend in this metric.

Looks like the metric has a red value currently | Source: CryptoQuant

The funding rates are highly negative at the moment, implying the majority of the contracts are shorts. Based on this the analyst thinks a short squeeze could possibly take place, which would propel the price in the short term.

However, the quant also believes that’s when the whales would potentially make their move, and dump the crypto.

BTC Price

At the time of writing, Bitcoin’s price floats around $16.5k, down 6% in the last week.

BTC continues to consolidate | Source: BTCUSD on TradingView

Featured image from Rémi Boudousquié on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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