Whale deposits to Binance reach a three-month high

Whales have activated their supply, sending coins to Binance during a turbulent market. Large-scale deposits to Binance reached a three-month high, a level that often predicts a market shift. 

Whale deposits of Bitcoin (BTC) to Binance have reached a three-month high, according to data from CryptoQuant. While overall exchange reserves trend lower, strategic whale transactions or profit-taking are moving more BTC to Binance. The exchange remains the most active and liquid market, drawing in the biggest traffic during peak market days. 

BTC is still sold near local peaks, as whales use some of their holdings to realize short-term gains. In the past month, whales deposited $6.64B in BTC to Binance, with especially large inflows on March 2 and other days of market turbulence. 

The recent inflow of deposits between 100 and 1,000 BTC accelerated as BTC traded with increased volatility. In the past month, BTC had two drawdowns, moving under $80,000 briefly. After the latest recovery, BTC once again slid to $89,036.06, after dipping to the $88,000 range. 

The recent movement of coins shows self-custodial whales often choose Binance for cashing out. Additionally, even a relatively small amount of available coins can move the market. Binance was also widely used by retail, but it was wallets with over 100 BTC that had the biggest impact on the price. 

Whales make up between 30% and 50% of inflows to Binance, with different activity levels depending on market conditions. Total daily exchange inflows often reach over 25,000 BTC for all markets. Often, those are matched by similar outflows, for a general trend of taking BTC off exchanges. 

The recent market moves show that overall holding behaviors offer basic support, but whales are always ready to take profits. The current daily inflows show BTC may be scarce in the long run, but there are enough coins to sway the market. 

Inflows from whales also affect the derivative market, leading to a series of predominantly long liquidations. 

BTC demand remains weak

In the past month, BTC absorbed multiple conflicting narratives, especially connected to US trade tariffs. This led to an overall indecisive market, where spot traders waited on the sidelines. BTC remained widely traded on derivative markets, rebuilding positions gradually after each liquidation. Currently, inter-exchange flows of coins are flashing a bearish signal, though the correlation is not always clear-cut. 

In March, BTC was behaving similarly to previous periods of recovery following a big de-leveraging event and a price drawdown. BTC showed retail capitulation, starting from the smallest holders. In the past few weeks, small-scale holders decreased from over 240K to around 170K. BTC is now held by wallets of significant value, while retails lags. Retail investors hold an estimated 1.60M coins, while large-scale whales hold 16.45M of all BTC. 

BTC retail demand is near its lower range but shows signs of returning after the recent capitulation. Derivative exchanges are rebuilding open interest, with millions flowing back in within hours. 

One of the signs of a local market bottom is the behaviors of whales on Bitfinex. Those traders have appeared during previous cycles, building up long positions following a market capitulation. Once again, Bitfinex whales have appeared, signaling the tides may be turning for BTC. 

Despite the inflows, BTC remains scarce when it comes to large-scale reserves. Exchanges only carry 2.5M coins, an all-time low. OTC desks are down to 141K BTC. BTC miners retain 1.92M coins, one of the biggest potential sellers for OTC buyers. 

The Bitcoin Fear and Greed index is starting to recover slowly, inching up to 26 points. The index is still in the extreme fear zone but also shows the beginning of a more optimistic period for the market. 

In the short term, BTC is still expected to range between $80,000 and $100,000, for another period of sideways prices. However, those periods allow strategic spot traders and whales to lock in gains and re-buy at a lower price.

Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now