Bitcoin recently hit a new all-time high, only to quickly drop. What gives? Let’s dive in.
A Temporary Setback?
After briefly reaching a record high of $124,000, Bitcoin tumbled to around $118,000. It’s been hanging around $118,000 since, and some analysts think this sluggishness might last a couple of weeks.
Binance: The Key Player
According to on-chain analyst BorisVest, the key to understanding this dip lies in Binance, the world’s biggest crypto exchange. They looked at two things:
- Bitcoin Netflow: This tracks the flow of Bitcoin into and out of Binance. A positive netflow means more Bitcoin is entering the exchange.
- Exchange Reserves:
This shows how much Bitcoin is held on Binance.
BorisVest noticed a positive Bitcoin netflow on Binance, meaning more Bitcoin was flowing into the exchange. This, combined with decreasing outflows, suggests a “distribution phase”—investors are selling their Bitcoin.
Whales and Volatility
As Bitcoin’s price soared, exchange reserves on Binance also increased. This means investors were sending their Bitcoin to Binance to sell for profit. Once the price peaked, the selling pressure intensified. Big Binance traders (“whales”) capitalized on this, selling their Bitcoin while new buyers were entering the market. This created significant selling pressure.
The Big Picture
BorisVest emphasizes that Binance’s massive trading volume makes its activity a major influence on the Bitcoin market. While the overall trend for Bitcoin is still positive, they predict continued selling pressure for the next one to two weeks due to this activity on Binance.
Current Price
At the time of writing, Bitcoin is trading around $117,490, up slightly in the last 24 hours.
