‘Net neutral’ — Rising Bitcoin exchange balances could be due to Huobi Chinese user block

Bitcoin
(BTC)
balances
rising
on
exchanges
may
not
be
a
sign
of
investors
preparing
to
sell,
new
research
argues. 

Unveiling
the

latest
data

from
across
exchanges
on
Dec.
28,
Glassnode
on-chain
analyst
TXMC
pointed
the
finger
at
fresh
changes
in
China
for
rising
balances
elsewhere.

Binance
“absorbing”
orphaned
Huobi
users

The
end
of
December
is
seeing
nerves
fray
as
a
rangebound
BTC
price
combines
with

increased
inflows

to
exchanges.

A
classic
indicator
that
traders
are
at
least
arming
themselves
to
de-risk
in
the
event
of
further
price
weakness,
Binance
has
been
particularly
closely
eyed
as
its
BTC
stocks
rise.

At
the
same
time,
however,
Chinese
investors
are
being
frozen
out
of
international
spot
trading
venues
in
the
aftermath
of
China’s
ongoing
crackdown
on
cryptocurrency
trading.

Huobi
Global,
the
international
off-shoot
of
Chinese
exchange
Huobi,
stopped
mainland
Chinese
citizens
from
accessing
its
trading
service
on
Dec.
15.
They
now
have
until
the
end
of
the
month
to
sell
funds,
after
which
a
one-
to
two-year
withdrawal
window
will
be
available
for
them
to
remove
them
from
their
accounts.

“From
16:00
(UTC)
on
Dec
31,
2021,
Mainland
China
users
can
no
longer
sell
their
holdings
or
conduct
any
transactions
involving
CNY,”
a
blog
post
issued
on
closure
day
reads.

“If
users
have
yet
to
withdraw
sell
orders
before
the
cessation,
the
system
will
automatically
cancel
all
pending
sell
orders.
The
withdrawal
function
will
remain
available
for
1
to
2
years,
and
notice
will
be
given
ahead
of
its
closure.
Mainland
China
users
are
advised
to
handle
their
digital
assets
as
soon
as
possible.”

As
a
result,
those
users
could
simply
be
moving
tokens
to
other
platforms,
explaining
the
increase
in
Binance’s
balance.

“Binance
has
made
noise
lately
as
their
exchange
balance
has
risen.
My
theory
is
they’re
absorbing
users
from
Huobi
and
elsewhere
as
China
shuts
down
some
exchanges
at
EOY,”
TXMC
commented
on
a
chart
supporting
the
idea.

“Curiously,
if
you
combine
Binance
+
Huobi
exchange
balances,
they’re
sideways.
Net
neutral.”


Bitcoin
exchange
balance
vs.
BTC/USD
chart.
Huobi
(blue),
Binance
(green),
combined
(red).
Source:
TXMC/Twitter

Liquidity
challenges

As
Cointelegraph

reported
,
concerns
over
a
sell-off
are
being
heightened
due
to
the
holiday
period
having
lower
volumes
and
shallower
markets
overall.



Related: Veteran
Bitcoin
hodlers
are
still
selling
record
low
amounts
of
BTC
despite
70%
gains
in
2021

This
lack
of
liquidity
could
exacerbate
any
sudden
moves,
with
major
institutional
players
only
returning
next
week.

Nuances
remain,
however,
as
retail
investors

continue
building

BTC
portfolios,
while
larger
investors
appear
less
certain.

A
retail-fuelled
mass
sell-off
event
is
likewise
thought
to
be
an
unlikely
occurrence
going
forward,
analysis

says
.

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