Bitcoin Chain Data Says No Sign Of FUD Among Binance Users
Despite the CFTC suing Binance, Bitcoin chain data has so far shown no signs of FUD developing among traders on the cryptocurrency exchange.
Binance-Related Bitcoin On-Chain Metrics Are So Far All Normal
Yesterday, news broke 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. Following the announcement, the market reacted with Bitcoin price dropping below $27,000.
Users of the exchange itself, however, seem to be calm so far. As one analyst explained in a CryptoQuant post, the FUD around the exchange is not visible in the BTC chain data.
The first relevant indicator here is the net exchange flow, which measures the net amount of Bitcoin entering or leaving exchange wallets. The chart below shows recent data for this metric.
The value of the metric seems to have been slightly negative in recent days | Source: CryptoQuant
As displayed in the chart above, Bitcoin Binance’s net flow has recently been negative, meaning that investors have withdrawn a net number of coins from the platform.
Usually when exchanges have trouble around them, investors develop FUD and many pullbacks are seen on the exchange. However, although some withdrawals have been observed, their magnitude is still relatively low.
From the chart, it is evident that larger peaks were only seen at the beginning of this month. This suggests that users have not yet panicked as they feel safe enough to keep their coins in Binance’s custody.
Next is the derivatives market-related metric, open interest, which measures the total amount of Bitcoin trading futures contracts that are open on Binance.
Looks like the value of the metric has been relatively high recently | Source: CryptoQuant
As is visible from the chart, Bitcoin’s open interest on Binance has surged very high with the recent price surge. The value of the metric did not change significantly after the CFTC news, suggesting that derivatives traders also did not close a large number of contracts and therefore did not show signs of FUD.
The funding rate, a measure of the periodic rate that futures traders are exchanging with each other, has also remained positive, showing that investors on the platform remain bullish on BTC.
The metric has a green value at the moment | Source: CryptoQuant
All of these indicators show that traders on the platform, whether spot or derivatives, have not shown any noticeable reaction to the CFTC lawsuit on the exchange. That is, of course, at least the story so far; it’s currently unclear whether things might 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 declined below $27,000 | Source: BTCUSD on TradingView
Featured Image of Kanchanara from Unsplash.com, Charts from TradingView.com, CryptoQuant.com