[Analysis] "Bitcoin deposits into Binance top $7.5 billion… similar to past bear markets"

In the bitcoin (BTC) market, an increase in exchange inflows and a simultaneous decline in the supply of stablecoins (cryptoassets pegged to the value of fiat currencies) have been observed, raising the possibility of a liquidity squeeze.

On the 13th (Korea time), CryptoQuant analyst Amr Taha said in a report that "cumulative bitcoin deposits into Binance over the past 30 days have surpassed $7.5 billion," adding that "this is the second instance in which exchange inflows have broken through that threshold."

The contributor said that "after whale inflows exceeded $7.5 billion in late November last year, bitcoin fell from around $92,000 to below $70,000," and assessed that "a similar pattern could repeat this time as well."

A decline in stablecoin supply is also a factor pointing to a bear market. The contributor explained that "the total supply of Ethereum (ETH)-based Tether (USDT) fell from more than $103 billion on Jan. 18 to about $96 billion on Feb. 12," adding that "this amounts to a supply contraction of roughly $7 billion in less than a month."

He added that "a similar case emerged in mid-May 2022, when the supply of Ethereum-based Tether declined by about $3 billion from $39 billion to $36 billion, after which bitcoin plunged from above $30,000 to below $20,000."

Finally, the contributor stressed that "an environment in which exchange inflows persist while stablecoin supply shrinks has historically led to declines in cryptoasset (cryptocurrency) prices," adding that "it does not necessarily imply an immediate crash, but aggressive long positions could be risky. Unless liquidity improves, upside potential may be limited."