Although Binance is seeing Bitcoin inflows, new data shows that overall, movements among major exchanges appear to cancel each other out.
According to new research, rising Bitcoin (BTC) balances on exchanges may not be a sign of investors preparing to sell.
TXMC, a Glassnode on-chain analyst, revealed the latest data from across exchanges on Dec. 28 and blamed fresh changes in China for rising balances elsewhere.
Orphaned Huobi users are “absorbed” by Binance
As a rangebound BTC price combines with increased inflows to exchanges, nerves are fraying at the end of December.
Binance has been particularly closely watched as its BTC stocks have risen, a classic indicator that traders are at least arming themselves to de-risk in the event of further price weakness.
At the same time, as a result of China’s ongoing crackdown on cryptocurrency trading, Chinese investors are being locked out of international spot trading venues.
On December 15, Huobi Global, the international arm of Chinese exchange Huobi, barred mainland Chinese citizens from using its trading platform. They now have until the end of the month to sell funds, after which they will have a one- to a two-year window to withdraw them from their accounts.
“Mainland China users will no longer be able to sell their holdings or conduct any transactions involving CNY beginning at 16:00 (UTC) on December 31, 2021,” according to a blog post published on the day of the closure.
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“The system will automatically cancel all pending sell orders if users have not yet withdrawn sell orders before the cessation.” The withdrawal function will be available for 1 to 2 years, with notice given before it is shut down. Users in mainland China should take care of their digital assets as soon as possible.”
As a result, the increase in Binance’s balance could simply be the result of those users moving tokens to other platforms.
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been making waves recently as their exchange balance has increased. TXMC commented on a chart supporting the theory, “My theory is they’re absorbing users from Huobi and elsewhere as China shuts down some exchanges at EOY.”
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“Intriguingly, the exchange balances of Binance and Huobi are sideways. “It’s net neutral.”
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Liquidity problems
Concerns about a sell-off have grown as a result of lower volumes and shallower markets during the holiday season, according to Cointelegraph.
With major institutional players only returning next week, the lack of liquidity could exacerbate any sudden moves.
However, there are still nuances as retail investors continue to build BTC portfolios, while larger investors appear to be less confident.
According to the analysis, a retail-fueled mass sell-off event is also unlikely to happen in the future.
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