Bitcoin Binance Netflow Turns Negative: What It Means

On-chain data shows the Bitcoin netflow on Binance has turned negative recently. Here’s what this could mean for the asset’s price.

14-Day SMA Bitcoin Binance Netflow Has Plunged Recently

In a CryptoQuant Quicktake post, an analyst has discussed about the trend in the 14-day simple moving average (SMA) of the Bitcoin Exchange Netflow for the Binance platform.

The “Exchange Netflow” here refers to an indicator that keeps track of the net amount of the cryptocurrency that’s entering into or exiting out of the wallets associated with a given centralized exchange.

When the value of this metric is positive, it means the investors are depositing a net number of coins to these platforms. As one of the main reasons why holders would transfer to exchanges is for selling-related purposes, this kind of trend can lead to a bearish outcome for the asset.

On the other hand, the indicator being negative implies there are more outflows taking place on the exchange than inflows. Such a trend can be a sign that the investors are accumulating, which can be bullish for the coin’s price.

Now, here is a chart that shows the trend in the Bitcoin Exchange Netflow for Binance, as well as its 14-day SMA, over the last few months:

The value of the metric appears to have seen a sharp negative spike recently | Source: CryptoQuant

As displayed in the above graph, the Bitcoin Exchange Netflow for Binance has seen a sharp negative spike during the past day, which implies the investors have withdrawn a large number of tokens from the platform.

During the second half of last month, the indicator mostly stayed inside the positive territory, which resulted in the 14-day SMA attaining a value greater than zero.

In the chart, the quant has highlighted the instances of the 14-day SMA showing this trend in the last few months. It would appear that the pattern has generally led to short-term declines for the asset in this period. The latest inflows into the platform, too, were accompanied by a drawdown in the Bitcoin price.

After the latest sharp negative spike has appeared in the daily version of the Binance Exchange Netflow, though, its 14-day SMA value has also dipped back into the red zone.

While a surge into the positive territory precedes a short-term decline for the asset, a plunge into the negative region usually leads to bullish price action. Thus, Bitcoin may currently be well-set in terms of this indicator.

In total, the users of the exchange have taken a net amount of 5,407 BTC off into self-custody during the latest negative spike in the Binance Exchange Netflow.