Binance Sees Biggest Bitcoin Drawdown, 40K BTC Out

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The largest crypto exchange in the world, Binance has seen the largest Bitcoin pullback in its history, according to recent data. The company could face a run on the banks as crypto investor confidence continues to slide following the collapse of the FTX trading platform and a US investigation into major crypto exchanges.

At the same time, positive economic data from the United States is having a positive impact on the market. Bitcoin is back above its previous yearly lows. As of this writing, the price of BTC is trading at $17,750 with a profit of 4% and 5% in the last 24 hours and the previous week, respectively.

BTC price trends down on the daily chart. Source: BTCUSDT TradingviewBitcoin Rally In Danger, Binance Takes A Stand

Data from on-chain analytics firm Glassnode, shared by Dylan LeClair, indicates that Binance has seen a massive drawdown of 40,000 BTC in the past 24 hours. Exits are almost double those seen in July 2021.

Around this time, the crypto market was experiencing a second capitulation event after hitting an all-time high north of $60,000. The cryptocurrency lost more than 50% of its value from May to the end of July.

In early November, the crypto exchange saw a major outflow as FTX went bankrupt. However, the market looks more bearish on crypto exchanges now than at two of its worst feelings, during the 2021 sellout and the FTX meltdown.

BTC outflows on Binance are increasing. Source: Glassnode via Dylan LeClair

Additionally, the crypto exchange had its worst stablecoin outflow since its inception. Additional data from LeClair indicates that Binance saw $2.1 billion in outflows in the past 24 hours. There are $20 billion in stablecoin reserves.

Overall, the exchange has enough funds to cover ten times its withdrawals, but market sentiment is negative and investor confidence in crypto continues to decline. Changpeng CZ Zhao, CEO of Binance, welcomed the pullbacks and classified them as stress tests:

We saw some drawdowns today (net $1.14 billion). We have seen this before. On some days we have net withdrawals; some days we have net deposits. As usual for us. In fact, I think it’s a good idea to test withdrawals on each CEX in turn.

Bitcoin exchange exits are often a bullish indicator. In the current environment, with lower inflation and a potential pivot from the US Federal Reserve (Fed), the perception of capital outflows has changed.

However, there is less bitcoin on exchanges, regardless of market sentiment. The less supply of BTC there is on these sites, the more support there is for a market rally.

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