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On-chain data shows that the Bitcoin reserve on Binance has surged in recent days, something that could be a sign of dumping.
Bitcoin Reserve on the Crypto Exchange Binance has seen strong growth in recent days
As noted by an analyst in a CryptoQuant afterfunding rates were negative while these inflows were happening.
The “exchange reserve” is an indicator that measures the total amount of Bitcoin currently stored in the wallets of a centralized exchange (Binance in this case).
When the value of this metric rises, it means that investors are now depositing their coins in the exchange. Since investors could be depositing on such a platform for selling purposes, this kind of trend could have a bearish effect on the price of the cryptocurrency.
On the other hand, the falling value of the reserve suggests that coins are currently leaving the exchange. Such a trend, if it continues, could be a sign of investor accumulation and thus could be bullish for BTC value.
Now, here is a chart showing 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 chart above, the Binance Bitcoin exchange reserve started falling rapidly about ten days ago when the crash started.
This happened because the collapse of FTX made investors more wary of crypto exchanges than ever before, and so they massively pulled coins from centralized platforms.
After seeing one last sharp dive a little less than a week ago, the indicator started moving sideways. However, in recent days, this trend has changed.
Binance Bitcoin exchange reserves are now rapidly rising again, suggesting that investors have deposited large sums.
This could be a sign of whale activity, and could imply that these giant keepers may be preparing to dump.
The quant has also talked about the trend of another indicator, the “Financing rate”, which tells us whether the futures market is currently trending short or long. The chart below shows the trend in this metric.
Looks like the metric has a red value currently | Source: CryptoQuant
Financing rates are currently very negative, implying that most contracts are short. Based on this, the analyst believes that a short squeeze could potentially take place, which would push the price up in the near term.
However, the quant also believes that the whales could strike at that point and dump the cryptocurrency.
At the time of writing, Bitcoin’s price is hovering around $16.5k, down 6% over the past week.
BTC continues to consolidate | Source: BTCUSD on TradingView
Featured image from Rémi Boudousquié on Unsplash.com, charts from TradingView.com, CryptoQuant.com