Bitcoin remains under the $120,000 price mark following a pullback triggered by remarks from the US Treasury that the federal government will not be purchasing the cryptocurrency.
Recent blockchain data has brought attention to activity on Binance, the world’s largest cryptocurrency exchange by trading volume.
This increase, measured by the Mean Inflow metric, reflects a greater volume of BTC being transferred into Binance wallets, potentially as preparation for selling, using as collateral for leveraged positions, or institutional portfolio adjustments.
The positive netflow trend, where inflows surpass withdrawals, supports this interpretation, showing that Binance’s Bitcoin reserves are growing. Historically, similar patterns have preceded periods of price volatility, particularly if large holders decide to offload positions or hedge via derivatives markets.
On the other hand, if these inflows are met with strong buying interest, they could provide liquidity for further price movement. The key factor remains whether the increase in exchange-held BTC is driven by selling intentions or strategic positioning ahead of market developments.
From May to late July, both Bitcoin’s price and the leverage ratio rose together, suggesting heightened participation from traders using larger positions.
Arab Chain noted that a lower leverage ratio during a period of price stability can be a constructive sign, as it implies that market support is coming from actual liquidity rather than excessive speculation.
Should the ELR remain between 0.24 and 0.25 while Bitcoin gradually moves above $120,000, it could signal a price advance driven more by spot demand than leveraged trading.
However, a sudden rise in the leverage ratio above 0.27 during another test of the $120,000–$124,000 range would increase the risk of a sharp correction.
Featured image created with DALL-E, Chart from TradingView
