Despite the CFTC suing Binance, Bitcoin on-chain data so far shows no signs of FUD developing among traders on the cryptocurrency exchange.
Bitcoin On-Chain Metrics Related to Binance Now 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 derivatives trading rules in the US. After the announcement, the market reacted with the price of Bitcoin, which fell at the level of $ 27,000.
Users on the exchange itself, however, seem calm so far. As the analyst in the CryptoQuant post explains, the FUD surrounding the exchange is not currently visible in the BTC on-chain data.
The first relevant indicator here is an exchange’s net flow, which measures the net amount of Bitcoin entering or exiting an exchange’s wallet. The chart below shows the latest data for this metric.
The value of the metric seems to have been slightly negative in recent days | Source: CryptoQuant
As shown in the chart above, the Binance Bitcoin netflow has had a negative value recently, which means that investors have withdrawn the net amount of coins from the platform.
Usually, when an exchange has problems around it, investors develop FUD, and many withdrawals are seen from the exchange. However, while some withdrawals have been seen, the size is still small.
From the chart, it is clear that a bigger spike is seen only in this month. This shows that users have not panicked because they feel safe enough to keep their coins on Binance.
Next is a metric related to the derivatives market, open interest, which measures the total number of open Bitcoin futures trading contracts on Binance.
Looks like the value of the metric has been relatively high recently | Source: CryptoQuant
As can be seen in the chart, Bitcoin open interest on Binance has risen very high with the recent price surge. The value of the metric did not change significantly after the CFTC news, indicating that derivatives traders have also not closed many contracts and, thus, do not show signs of FUD.
The funding rate, a measure of the periodic fees that futures traders exchange, also remained positive, indicating that investors on the platform continue to be bullish on BTC.
The metric has a green value at the moment | Source: CryptoQuant
All these indicators show that traders on the platform, whether spot or derivative, have not shown any real reaction to the CFTC suing the exchange. That, of course, is the best story so far; it is currently unclear whether there will be any changes 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 images from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com