On-chain information indicates that the Bitcoin netflow on Binance has recently turned negative. Here’s what this could signify for the asset’s valuation.
14-Day SMA Bitcoin Binance Netflow Has Recently Declined
In a CryptoQuant Quicktake article, an analyst examined the trend in the 14-day simple moving average (SMA) of the Bitcoin Exchange Netflow for the Binance exchange.
The “Exchange Netflow” refers to an indicator that monitors the net amount of the cryptocurrency entering or leaving the wallets connected to a particular centralized exchange.
A positive reading of this indicator means that investors are depositing a net total of coins onto these platforms. One of the primary reasons holders transfer assets to exchanges is for selling, making such a trend potentially bearish for the asset.
Conversely, a negative reading suggests that the exchange is experiencing more outflows than inflows. This trend might indicate that investors are accumulating coins, which could be bullish for the cryptocurrency’s price.
Here’s a chart illustrating the Bitcoin Exchange Netflow for Binance and its corresponding 14-day SMA over recent months:
The metric appears to have experienced a considerable negative spike recently | Source: CryptoQuant
As revealed in the above chart, the Bitcoin Exchange Netflow for Binance has notably declined in the last day, indicating that a significant number of tokens have been withdrawn from the exchange.
In the latter half of the previous month, the indicator mostly remained in the positive zone, resulting in the 14-day SMA remaining above zero.
The chart highlights periods where the 14-day SMA has displayed this trend over recent months. It seems that such patterns have generally resulted in short-term declines for the asset during this timeframe. The latest inflows into the exchange were also associated with a decrease in Bitcoin’s price.
Following the recent considerable negative spike in the daily version of the Binance Exchange Netflow, its 14-day SMA value has also fallen back into the negative territory.
While a rise into positive territory typically precedes a short-term decline for the asset, a drop into the negative area generally leads to bullish price movements. Therefore, Bitcoin might currently be favorably positioned based on this indicator.
In total, users of the exchange have withdrawn a net amount of 5,407 BTC into self-custody during the latest negative spike in the Binance Exchange Netflow.
BTC Price
Bitcoin has reversed its recent recovery over the past 24 hours, with its price sliding below the $98,000 threshold.
It appears the price of the coin has already lost its gains from yesterday | Source: BTCUSDT on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com