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After weeks of volatile performance, Bitcoin is in the spotlight once again as on-chain data highlights important trends emerging from Binance, the world’s largest cryptocurrency exchange.
The latest insights reveal an interesting movement in Binance’s Netflow simple moving average (SMA14), a leading indicator often associated with shifts in Bitcoin’s short-term price trend.
Historically, this metric has provided reliable signals regarding platform investor sentiment and accumulation behavior.
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Binance Netflow data signal collection phase
Modern analysis Written by Burak Kesmisi, CryptoQuant Analyst, highlights Binance’s Netflow data for the past 90 days. According to Kesmeci, when the Netflow SMA14 moves into positive territory, Bitcoin tends to face short-term selling pressure, leading to temporary corrections.
Conversely, when this indicator turns negative, it indicates a shift in investor sentiment towards accumulation, which may indicate a short-term uptrend.
On January 6, 2025, Binance’s Netflow metrics revealed some notable insights. Netflow on Binance recorded a value of -5,407 BTC, while the 14-day simple moving average (SMA14) of Netflow was -483 BTC.
These negative readings indicate that more bitcoins are exiting the exchange than entering, a behavior typically associated with investor accumulation.
Binance Netflow SMA14 turns negative
“Both metrics confirm that investor behavior on Binance is leaning towards accumulation. This trend strongly supports the case for a bullish movement in Bitcoin price in the short term. – By @burak_kesmeci
Link 👇https://t.co/jSkRZ2TjLk pic.twitter.com/Rau37VjBQN
— CryptoQuant.com (@cryptoquant_com) January 7, 2025
Historically, these trends have served as early indicators of potential upward price movement, as lower Bitcoin availability on exchanges reduces immediate selling pressure.
When Bitcoin holders move their assets off exchanges, it usually indicates their intention to hold them for the long term rather than sell. This pattern of behavior contributes to a supply squeeze scenario, where reduced liquidity on trading platforms creates upward pressure on prices.
The fact that Binance is the largest cryptocurrency exchange by trading volume gives this indicator greater credibility as the platform often serves as a barometer of broader market sentiment. Al-Kashmaji concluded:
In short, both metrics confirm that investor behavior on Binance is leaning towards accumulation. This trend strongly supports the case for a bullish movement in Bitcoin price in the short term.
Bitcoin market performance
Bitcoin’s bullish momentum appears to be losing steam, as recent price action has shown limited strength to sustain the rally. Just 24 hours ago, Bitcoin was trading above $102,000 after a 4% rally. However, the asset has since retreated, erasing most of those gains and settling above the $100,000 threshold.
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At the time of writing, Bitcoin’s price is $100,630, reflecting a modest 1.3% increase over the past day. Despite this slight rise, the asset is still approximately 7% below its all-time high of $108,135, which was recorded last month.
Featured image created with DALL-E, chart from TradingView
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