Despite the CFTC’s lawsuit against Binance, bitcoin’s on-chain data so far has shown no signs of FUD developing among traders on the cryptocurrency exchange.
Bitcoin on-chain metrics related to Binance are all normal so far
It was announced yesterday that the US Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance and its CEO, Changpeng Zhao, for violating US derivatives trading rules. After the announcement, the market reacted with the price of Bitcoin falling below the $27,000 mark.
However, users on the exchange itself seem to be calm so far. As one analyst explained in a CryptoQuant post, FUD is currently not visible in BTC on-chain data around the exchange.
The first relevant indicator here is exchange netflow, which measures the net amount of bitcoin entering or exiting the exchange’s wallets. The chart below shows the most recent data for this metric.
The value of the metric seems to have been slightly negative for the past few days | Source: CryptoQuant
As shown in the chart above, Bitcoin Binance’s netflow has been negative lately, meaning that investors have withdrawn a net number of coins from the platform.
Usually when exchanges are struggling, investors develop FUD and many withdrawals from the exchange are seen. Although there have been some withdrawals, the magnitude is still relatively small.
The chart shows that larger spikes were seen earlier this month alone. This suggests that users haven’t panicked just yet, as they feel safe enough to leave their coins in Binance’s custody.
Next comes the metric related to the derivatives market, open interest, which measures the total amount of bitcoin futures trading contracts that are open on Binance.
It looks like the value of the metric has been relatively high recently | Source: CryptoQuant
As can be seen in the chart, Bitcoin open interest on Binance has spiked too high with the recent price surge. The value of the metric hasn’t seen a significant change after the CFTC news, suggesting that the derivatives traders haven’t closed a large number of contracts either, thus showing no signs of FUD.
The funding rate, a measure of the periodic fee that futures traders exchange with one another, has also remained positive, showing that investors on the platform remain bullish on BTC.
The metric currently has a green value | Source: CryptoQuant
All of these indicators show that traders on the platform, whether spot or derivatives traders, have shown no noticeable response to the CFTC’s lawsuit against the exchange. At least that’s the story so far, of course; It is currently unclear if things could change in the coming days.
BTC price
At the time of writing, Bitcoin is trading around $26,800, down 4% over the past week.
BTC has fallen below $27,000 | Source: BTCUSD on TradingView
Featured image by Kanchanara on Unsplash.com, charts by TradingView.com, CryptoQuant.com
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