After weeks of fluctuating performance, Bitcoin is once again in the spotlight as on-chain data reveals critical trends emerging from Binance, the world's largest cryptocurrency exchange.
The latest look reveals that there has been an interesting trend in the Netflow Simple Moving Average (SMA14), a key indicator often associated with movements in Bitcoin's short-term price direction.
Historically, this metric has provided reliable indicators of investor sentiment and the platform's collection behavior.
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Binance Netflow data token collection rate
Recently analysis with CryptoQuant analyst Burak Kesmeci shedding light on Binance's Netflow data from the past 90 days. According to Kesmeci, when the Netflow SMA14 moves to positive territory, Bitcoin tends to face short-term selling pressure, leading to temporary corrections.
On the other hand, when this indicator turns negative, it suggests a shift in investor sentiment towards accumulation, which may indicate short-termism. bullish trend.
On January 6, 2025, Binance's Netflow metrics revealed some unique insights. The Netflow on Binance recorded a value of -5,407 BTC, while the 14-day simple moving average (SMA14) for Netflow stood at -483 BTC.
These negative readings indicate that more Bitcoin is leaving the exchange than entering it, a commonly associated behavior collection of investors.
Binance Netflow SMA14 is turning negative
“Both metrics confirm that investor behavior on Binance is leading to accumulation. This move strongly supports the case for an upward move in the price of Bitcoin in the short term.” – With @burak_kesmeci
Link 👇https://t.co/jSkRZ2TjLk pic.twitter.com/Rau37VjBQN
— CryptoQuant.com (@cryptoquant_com) January 7, 2025
Historically, such movements have been early indicators of a possible upward price movement, as the availability of Bitcoin on exchanges decreases immediate sales pressure.
When Bitcoin holders move their assets from exchanges, it usually indicates their intention to hold for the long term rather than sell. This behavior pattern contributes to a supply squeeze situation, where lower liquidity on trading platforms creates upward price pressure.
The fact that Binance is the largest cryptocurrency exchange by trading volume lends more credibility to this indicator as the platform often serves as a barometer for broader market sentiment. Kesmeci concluded:
In summary, both metrics confirm that investor behavior on Binance is leading to accumulation. This trend strongly supports the case for an upward movement in the price of Bitcoin over the short term.
Bitcoin market performance
Bitcoin's bullish trend appears to be losing steam, as recent price action shows limited strength to sustain a rally. Just 24 hours ago, Bitcoin was trading above $102,000 after a 4% increase. However, the fund has since regressed, erasing most of those gains and stable just above the $100,000 threshold.
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At the time of writing, the price of Bitcoin is at $100,630, showing a slight increase of 1.3% over the past day. Despite this small increase, the fund is still about 7% lower than the all-time high of $108,135, which was recorded last month.
Featured image created by DALL-E, Chart from TradingView
