Unique Data in Binance Deposit and Withdrawal Statistics – What Does It Mean?

CryptoQuant, a cryptocurrency analytics company, pointed to a remarkable and historically significant divergence in its latest analysis of the Bitcoin market, based on Binance data.

According to the company’s assessment, investor behavior is signaling a strong supply shock as Bitcoin trades around $91,000.

According to CryptoQuant’s on-chain data, Binance, the world’s largest cryptocurrency exchange, is experiencing an unprecedented divergence between withdrawal and deposit transactions. The analysis indicates that while Bitcoin prices are consolidating at high levels, investors are not showing interest in selling; instead, they are withdrawing their assets from exchanges and moving them to their own wallets. Analysts believe this suggests a strengthening trend towards long-term holding (HODL) rather than short-term trading.

According to the data, the 30-day exponential moving average (EMA-30) of withdrawals from Binance reached its highest level since May 2018 on December 3rd, with approximately 3,100 transactions per day. On the other hand, the opposite is true for sales. The 30-day average of deposits to Binance fell to its lowest level since 2017, dropping to around 320 transactions.

CryptoQuant considers the drop in withdrawals to their highest level in seven years and investments to their lowest level in eight years as a classic “supply shock” scenario. The company argues that under normal circumstances, when Bitcoin approaches all-time highs, long-term investors send coins to exchanges to realize profits, but the current data shows the exact opposite.

The analysis stated, “The current supply is being withdrawn from order books, and there is virtually no new selling pressure. This behavior indicates that investors have a very strong belief that the price discovery process is not yet complete.”

*This is not investment advice.