On May 7, there were three huge changes in Binance’s Bitcoin balance. According to data analytics platform CryptoQuant, they consisted of an outflow of 117,359 BTC, an inflow of 10,036 BTC, and an outflow of 40,184 BTC.
However, it is likely to be down to internal wallet adjustments rather than whales moving their BTC off the exchange.
Industry analyst Colin Wu did a little more digging, concluding:
“According to further on-chain inspection, it is likely that the Binance cold wallet was internally adjusted to a new address, and the new address did not transfer out after receiving funds.”
Binance Suspends Transactions
The WhaleWire account said it was the largest single withdrawal in the exchange’s history, with a value of $4.6 billion. It was questioned whether whales or insiders were “jumping ship,” but this is very unlikely to be the case.
Are Whales/Insiders jumping ship? 👀 pic.twitter.com/QSXYAEvHkt
— WhaleWire (@WhaleWire) May 7, 2023
Binance has been retiring old wallet addresses and prompting its customers to update them to new addresses.
The company has been emailing users, notifying them that their ERC-20 addresses would be expiring on May 9. However, there has been no such notice for Bitcoin addresses as yet, so the movements may be in preparation for further system and wallet security upgrades.
“Binance has been upgrading its wallet infrastructure to ensure better wallet efficiency and security. As such, we will be retiring the current deposit addresses and memo on selected networks, and users are required to obtain a new deposit address.”
Furthermore, on May 7, Binance temporarily suspended BTC withdrawals due to network congestion. The suspension only lasted a couple of hours, and services were quickly resumed.
On May 8, Binance suspended BTC transactions again “due to the large volume of pending transactions.”
This could be related to the large internal wallet movements, however, Binance did not clarify.
We’ve temporarily closed #BTC withdrawals due to the large volume of pending transactions.
Our team is currently working on a fix and will reopen $BTC withdrawals as soon as possible.
Rest assured, funds are SAFU.
— Binance (@binance) May 8, 2023
BTC Price Outlook
BTC prices have retreated 1.6% on the day in a fall to $28,448 at the time of writing. The asset hit a weekend high of $29,724, but again resistance above $30K proved too much to overcome.
BTC has tapped this level four times over the past fortnight, each one resulting in a sharp pullback as buying pressure is exhausted. Support on the downside can be found around the $28,000 price level.