- Binance reserves dropped about $8 billion in seven days across BTC, ETH, USDT, and USDC, per CryptoQuant’s Julio Moreno.
- Total reserves hovered near $135 billion as USDT hit a $38.2 billion high, pointing to uneven flows on the exchange.
- Volatility stayed elevated with BTC down ~10% and ETH down ~20% over the week, keeping liquidity risk top of mind.
CryptoQuant’s Head of Research Julio Moreno said Binance reserves fell about $8 billion over the past seven days. The decline showed up across Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and USD Coin (USDC). He noted the move fit within patterns seen earlier in this cycle rather than a break in trend.
USDT set a $38.2B high while total reserves stayed near $135B
Highlighting more details, Moreno noted that the digital asset total reserves on Binance hovered around $135 billion, with the USDT reserve growing to a new all-time high of $38.2 billion.
It is worth noting that the digital asset reserves on major exchanges influence crypto traders’ behavior, playing a significant role in their interpretation of upcoming trends. Typically, a dip in reserve means there are fewer tokens of a particular cryptocurrency on the trading platform, implying a drop in liquidity.
Related: Binance Disputes $21.75B Outflow Reading; BTC Holds $111K As Method Math Draws Fire
Why lower exchange reserves tie to liquidity and volatility
Historical data reveal that the cryptocurrency market becomes more volatile whenever digital asset reserves experience a decline. That is because large buy or sell orders would have greater effects on crypto prices, owing to relatively lower liquidity.
Thus, the cryptocurrency market tends to become more volatile when the reserves of top digital assets drop on major exchanges.
Seven-day price snapshot for BTC and ETH
According to data from TradingView, Bitcoin experienced a 10% decline within the past seven days, coinciding with Moreno’s observed decline in digital asset reserves. Ethereum’s price fell by 20% during the same period, amid a pullback that affected nearly the entire cryptocurrency market.
In the meantime, most cryptocurrencies have established new support levels as rebound expectations heighten. However, bearish pressure persists across the board as traders await external decisions, such as the SEC’s expected approval of ETFs for various altcoins, to form the tailwind for the next phase of the bull cycle.
Related: U.S. Treasury Clarifies Position on Strategic Bitcoin Reserve Plans
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