Posted:
- Bitcoin spot volume on Binance fell 57% between September 1 and 20.
- Although the BTC/TUSD fee has changed, Bitcoin may not experience significant selling pressure.
Bitcoins [BTC] Spot volume hit a 35-month low after falling another 8% over the past seven days, according to K33 Research. When measuring spot volumes for any asset, the stock exchanges are the right place to look. This is because they are the ones offering trading pairs on the spot market.
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Binance is driving Bitcoin’s decline
A compelling reason why the king coin volume fell was the seven-day spot volume Binancewhich fell by 57% since the beginning of September.
Source: K33 Research
For the most part, the decline may be related to the regulatory battles that Binance seemed to be fighting. However, that wasn’t the case as one particular decision turned out to be the driving force behind the dive.
On September 7, Binance suffered an unexpected event decision to change the fees applied to the BTC/TUSD pair. According to the exchange, the taker fee for the pair changed from zero to a rate based on the VIP level a user had.
As a result of the decision, BTC/TUSD volume, which involved 380,000 Bitcoins between August 31 and September 6, dropped to 90,000 Bitcoins between September 7 and 14. This drop was a sign of traders’ dissatisfaction with the decision to change the rate.
At the same time, the resolution could be linked to Binance’s desire to limit the use of the First digital USD [FDUSD].
Recall that Binance had announced the introduction of the stablecoin as a possible replacement for Binance USD [BUSD], which was in a phase of phasing out. So it was no surprise when FDUSD’s market cap grew 51% to $394 million on September 6.
Rest between the storm
When I look at the exchange mains power, CryptoQuant showed that Bitcoin had a net flow of -4,191. This measure is the difference between Bitcoin flowing into the exchanges and the Bitcoin flowing out. For spot exchanges, high values assign sales pressure.
However, the value mentioned above was in the negative range. So Bitcoin was not experiencing major selling pressure until the time of writing.
Source: CryptoQuant
The exchange net flow inference was further strengthened by the seller exhaustion constant. The Bitcoin seller’s depletion constant is the product of the 30-day price volatility and the percentage supply of profit.
Whatever value comes out of this calculation will show low-risk bottoms or high-risk tops.
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At the time of writing, Bitcoin’s depletion constant was 0.023. A value like the one mentioned here implied that the broader market had no intention of selling BTC at the time of writing.
Source: Glassnode
It also reflected a possible chance of Buy Bitcoin at a price very close to the bottom, given the current cycle. Therefore, regardless of Binance’s volume decline, Bitcoin’s price will not experience a sharp decline anytime soon.