- According to data, more short-term investors are transferring their Bitcoins to exchanges.
- Despite the high metric, it still remains low compared to other historical periods.
- On the day Binance exchange was sued, which was June 5th, the exchange’s reserves decreased by $2.74 billion.
On-chain metrics show that short-term Bitcoin investors are transferring their BTC to exchanges, but the fear in the market is less than expected.
Investors are Sending their BTC to Exchanges
According to data, more short-term investors are transferring their Bitcoins to exchanges. Current data shows that the current entry metric has recorded a value of 0.82%. This is the highest value reached since the beginning of April 2023.
Despite the high metric, it still remains low compared to other historical periods. Some of the periods recorded on Glassnode include the LUNA/FTX capitulation and subsequent relief rally.
Short-term Investors Sending their Bitcoin from Wallets to Exchanges (Percentage)
Crypto exchanges experienced a 1.8% capitulation entry during the LUNA crash, while the figure was 1.47% after the FTX crash. Both events occurred at different times in 2022.
Another period where the short-term investor balance increased significantly was during the relief rally in March 2023. At that time, Bitcoin reached its annual peak and then consolidated.
The balance of short-term investors sent to exchanges is a metric used to measure trader behavior. Traders also use this to estimate the supply and demand sensitivity prevailing in the Bitcoin market.
When short-term investors send their Bitcoins to exchanges, it indicates an impending liquidation. Traders can often exchange their Bitcoins for stablecoins to avoid expected volatility or prepare for an alternative crypto season. They do not use the metric alone, but combine it with information on other chains to understand applicable options.
However, ongoing fear due to the SEC attacks on Coinbase and Binance may play a significant role. Currently, there is no significant impact due to FUD, as blocks on the Bitcoin network continue to be created normally.
Effects of SEC Lawsuits on the Market
The US Securities and Exchange Commission (SEC) filed a lawsuit against Binance exchange on June 5th and Coinbase exchange on June 6th. In addition, the SEC also filed a lawsuit against Binance CEO Changpeng Zhao. The prices of Bitcoin and cryptocurrencies showed a sharp decline during these lawsuits.
However, before the lawsuit was filed against Binance exchange, on June 4th, the total reserves of the exchange were close to $60.2 billion. After the lawsuit was announced on June 5th, there was a slight decrease in reserves, and the current reserve of the exchange is just over $57.4 billion.
Although SEC lawsuits created a shock effect in the market, there was no significant decrease in Binance reserves. On June 5th, the day Binance exchange was sued, the exchange’s reserves decreased by $2.74 billion. On June 6th, Binance’s reserves increased by $1.59 billion.
