Bitcoin Whales Go Silent on Binance as Inflows Plummet: Is a Supply Shock Coming?

Bitcoin whale deposits to Binance have significantly declined this December. According to CryptoQuant, this decline could be a positive sign in the short term, suggesting that there is less immediate sell-side supply entering the market's leading exchange.

Key Takeaways:

Bitcoin whale deposits to Binance have sharply declined in December.
The drop in whale inflows can indicate reduced selling pressure.
There is a potential risk of sudden market movements despite lower deposit levels.
Recent data shows that realized losses from "new whales" are stabilizing.
Despite calmer conditions, large whale transactions can still influence volatility.

Bitcoin whale news Binance

Decreasing Selling Pressure on Bitcoin

On December 24, CryptoQuant analyst Darkfost noted a distinct drop in Bitcoin inflows from whales to Binance over the month. He highlighted that whale inflows decreased from approximately $7.88 billion to $3.86 billion, effectively halving in just a few weeks. Darkfost referred to this as “a significant slowdown in BTC deposits to Binance by the largest holders.”

Bitcoin: Binance Whale to Exchange Flow

Bitcoin: Binance Whale to Exchange Flow | Source: X @Darkfost_Coc

This bullish interpretation stems largely from the mechanics of the market. While exchange inflows don’t directly equate to selling, they are necessary for large-scale selling, and Binance remains the primary player in exchange-related transactions, according to CryptoQuant.

Darkfost stated: “In the current situation, the observed trend looks positive. Binance continues to capture the largest share of exchange-related flows. A decline in inflows from major participants like whales usually indicates reduced selling pressure.”

However, he cautioned that a general downturn in deposits does not eliminate the possibility of sudden, significant market movements, noting, “This broader trend doesn’t exclude the chance of considerable transfers occurring unexpectedly. Some inflows can still affect the market, even if they are somewhat isolated.”

He cited a recent example of a $466 million surge from wallets containing between 100 BTC to 10,000 BTC, as well as over $435 million in inflows from the 1,000 to 10,000 BTC range.

These sudden spikes are noteworthy since they can introduce volatility even in calmer periods. Darkfost remarked that large holders maintain the potential to influence market volatility at any moment despite a broader slowdown. He explained that when major holders transfer thousands of BTC in one go, it can lead to sharp price movements, whether through sudden spikes in volatility or deeper corrections, depending on the transaction volumes.

Pause in BTC Whale Activity

In a separate CryptoQuant update from December 23, the firm echoed the sentiment that the most intense stress among whales might have eased. They referred to it as “Whale Capitulation on Pause,” noting that realized losses from “new whales” played a significant role in the price drop from $124K to $84K. Since hitting the recent low, CryptoQuant reported that these realized losses have leveled off.

Bitcoin Realized Profit by Whales

Bitcoin Realized Profit by Whales | Source: X @cryptoquant_com

Taken together, these insights suggest that one source of short-term supply pressure, the significant deposits into Binance, has cooled. Additionally, the impulse caused by realized losses created by "new whales" is no longer escalating. The only cautionary note remains that the market may appear quiet overall but could be disrupted by a few large deposits if whales decide to transact in sizable amounts again.

As of now, Bitcoin is trading at $87,792.

Bitcoin price chart

Bitcoin is currently positioned between the 0.618 and 0.786 Fibonacci levels on the one-week chart | Source: BTCUSDT on TradingView.com