Bitcoin On-Chain Data Shows No Signs Of FUD Among Binance Users
Recently, the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and its CEO, Changpeng Zhao, for allegedly violating derivatives trading regulations in the US. This caused the price of Bitcoin to drop below $27,000, and many investors were worried about the future of Binance. However, Bitcoin on-chain data has shown no signs of fear, uncertainty, and doubt (FUD) among traders using the cryptocurrency exchange.
According to a CryptoQuant post, users on the exchange remain calm despite the news. The post points out two on-chain metrics: the exchange netflow and open interest.
The exchange netflow measures the net amount of Bitcoin entering or exiting the wallets of Binance. The graph shows that the metric has been slightly negative in recent days, indicating that investors have withdrawn a net number of coins from the platform. However, while some withdrawals have been seen, their magnitude is still relatively low.
Normally, when there’s trouble surrounding an exchange, investors develop FUD and withdraw their coins from the platform. But since the magnitude of withdrawals from Binance has been relatively low, it suggests that users still feel safe enough to keep their coins in the custody of Binance.
The open interest metric measures the total amount of Bitcoin futures trading contracts that are open on Binance. The graph shows that the metric has remained the same following the CFTC news, indicating that derivative traders have not closed a large number of contracts and have not shown any signs of FUD.
The funding rate, another measure of the periodic fee that futures contract traders exchange with each other, has also remained positive, showing that investors on the platform continue to be bullish about Bitcoin.
All these on-chain indicators show that traders on the platform, whether spot or derivative ones, have not shown any noticeable reaction to the CFTC lawsuit against the exchange. However, it’s unclear whether things might change in the coming days.
Bitcoin’s price is currently trading around $26,800, down 4% in the last week. It’s worth noting that Bitcoin’s price can be volatile, and it’s not unusual for it to make sudden and dramatic movements.
It’s also important to remember that the cryptocurrency market is relatively new, and regulatory bodies are still figuring out how to approach it. The CFTC’s lawsuit against Binance is just one example of how regulatory bodies are trying to enforce regulations and protect investors.
In conclusion, the on-chain data related to Binance and Bitcoin has shown no signs of FUD among traders on the platform. However, investors should always stay vigilant and keep an eye out for any market-moving news. Investing in any asset comes with risks, and it’s essential to understand these risks before investing.
