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On-Chain Analysis: Significant BTC Inflow in Binance Precedes Sharp Drop

2 mins
Updated by Ana Alexandre
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In Brief

  • May 17 marked the highest inflow of BTC since March 2020.
  • The inflow was seen on Binance but not on Coinbase.
  • BTC decreased by 48% relative to its all-time high on May 19.
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The most significant inflow of bitcoin (BTC) into exchanges since March 2020 preceded the massive decrease on May 19.  It is interesting to note that the inflow was present on Binance, but did not occur on Coinbase.

BTC inflow

The net transfer volume is created by subtracting the number of coins withdrawn from the number of coins deposited into exchanges. On May 17, the net BTC transfer volume to all exchanges was the highest recorded this year, measuring 32,274. In fact, this was the highest number since March 12, 2020, when the net transfer volume was 41,204. Both inflows preceded a very significant drop.
Glassnode Inflows
Chart By Glassnode

Binance vs Coinbase

A closer look at different exchanges shows a distinct difference between the inflows for Coinbase and Binance. In Coinbase, there was a virtually neutral inflow. Furthermore, there has been a general net outflow since January 21. Coinbase is often associated with institutional buyers, so the assumption that institutions are increasing their positions can be made. On the other hand, there was a significant inflow in March 2020.
Net flow Coinbase
Chart By Glassnode
However, an entirely different story is present when looking at the data for Binance. In it, the May 17 inflow dwarfed that of March 2020. Binance is usually associated with retail buyers. Therefore, the assumption can be made that retail investors were the instigators of the decrease. Interestingly, there was an outflow right after the decrease, indicating that a significant number of BTC had been moved out of the exchange.
Net flow Exchange
Chart By Glassnode

BTC all-time high drawdown

An intriguing visual is created when looking at the BTC price drawdown from all-time high. In the 2017 bullish run, the two biggest drawdowns from the all-time high were at 39% (blue icons). Those occurred on July 16 and Sept. 15, respectively. Yesterday’s decrease marked a 48% drawdown from the current all-time high. Therefore, it is unprecedented in terms of a bull run. If the price is still in a bullish trend, it would be expected to bounce significantly from the current level.
ATH Drawdown
Chart By Glassnode
For BeInCrypto’s latest bitcoin (BTC) analysis, click here.
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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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