Binance moved 42.8% of total spot trades last week, while absorbing 79.7% of the short selling pressure across the five major exchanges, according to Traderview data.
This imbalance raises the question of whether a venue needs to serve a “large portion of the market” in order to set a market-wide price.
The answer is no. The venue should be where the market most often determines prices.
According to CryptoQuant contributor Darkfost, between February 2nd and 3rd, Binance recorded its largest Bitcoin (BTC) inflow of the year, with approximately 56,000 to 59,000 BTC flowing into the exchange, with Bitcoin trading at nearly $74,000.
At current prices, that amount exceeds $4.3 billion in nominal terms. According to data from CoinMarketCap, Binance's 24-hour spot trading volume is approximately $18.5 billion, or 251,758 BTC, which translates to approximately 22% to 23% of daily Bitcoin spot churn on the platform.
Deposits increase seller option by making inventory available for immediate sale, but they are not time-stamped sales tickets. CryptoQuant defines exchange inflows as coins deposited into the exchange's wallet, and explicitly warns that increased inflows do not always lead to immediate sales.
These can reflect the provision of liquidity for derivatives, collateral movements, or internal settlements. The theory is not that Binance “dumped” Bitcoin, but rather that because the exchange controls the most important print of the market, it went into marginal selling even though it doesn't control most of the market's volume.
Why marginal sellers are more important than maximum sellers
“Net selling pressure” in the trader's view refers to the net taker volume, the imbalance between market selling and market buying.
This is often tracked as cumulative volume delta (CVD), which is the cumulative sum of taker buy volume minus taker sell volume.
Negative CVD indicates more aggressive selling than buying, and indicates that selling in the market is raising bids rather than filling passive limit orders. It's not just who appears in the headline volume that matters, but who appears in the spread.
According to Traderview calculations, Binance sold 3.9 times more Bitcoin than all other major venues combined, despite having less total trading volume. Concentration is key because Binance acts as a structural price discovery hub.
A 2024 academic paper identifies Binance spot and perpetual futures as the primary source of Bitcoin price discovery, and their leadership can be attributed to lower costs and increased trading volumes.
Kaiko's research, cited by Binance itself, describes the exchange as offering “deep and resilient liquidity.”
Price discovery does not occur in the same way everywhere. It occurs where liquidity is deepest, derivative risk is resolved fastest, and arbitrageurs monitor most closely. Binance ticks all three boxes.
According to Kaiko, perpetual futures will account for about 68% of all Bitcoin trading volume in 2025, and Binance, ByBit, and OKX together hold about 70% of open Bitcoin perpetual contracts.
Once purp risk eases, the spot becomes a hedge leg. That order flow prints the tape, and other order flows reprice the tape.
The interaction between Binance and other venues is mechanical.
Arbitrage traders reduce confusion across exchanges by buying Bitcoin when it is low and selling it when it is high. Once the connection works, the prices will be linked within seconds. If not, your premiums will expand and continue.
One example is Coinbase Bitcoin Premium, which tracks the spread between Coinbase's BTC/USD and Binance's BTC/USDT.
The premium is not solely due to demand, as it reflects plumbing differences, financing costs, and transfer frictions between USD and USDT.
But Premium's actions reveal just how closely connected the venue is. Once the premium is compressed, arbitrage occurs again. When it spreads, it puts a strain on the connection.
Propagation speed of Binance-led movement
Premium cross-venue tracking shows you the health of your arbitrage in real time.
The CoinGlass Coinbase Bitcoin Premium Index features spreads as a measure of connectivity rather than a sentiment gauge. A widening premium indicates that the arbitrage balance sheet is constrained or the pipes are clogged.
Compression means the nervous system of the market is working.
Liquidity depth measures how much size a market can absorb before prices change. Professor Kaiko uses 1% market depth, or the dollar value of bids and offers within 1% of the mid, as a practical measure of absorptive capacity.
As the depth decreases, the same selling imbalance causes a larger move. Kaiko-related research notes that while the market's depth exceeds $600 million at recent highs, liquidity capacity could collapse in times of stress.
The speed of propagation of the Binance-led move will depend on how quickly arbitrage capital reacts. In a healthy state, the average value of the premium shock recovers within minutes.
Under stress, dislocations persist and spread. Academic studies have documented recurring arbitrage gaps in cryptocurrency markets, suggesting that prices will converge if arbitrage capacity is healthy. Segmentation appears when constrained.
Binance’s role as a marginal seller requires no intrigue. It requires three things: deep liquidity, derivatives dominance, and arbitrage connectivity. All three are structural features of the current market.
Three scenarios that will happen next
Binance is putting $4.3 billion in inflows at risk as inventory. Whether that translates into real selling pressure depends on flows, liquidity, and connectivity.
In the base case, inflows are collateral or positioning, selling pressure weakens, and cross-venue premiums compress towards zero. The connection will be restored.
This scenario becomes more likely if broader flows turn to support. According to Pharcyde Investors, the Spot Bitcoin ETF had net inflows of $561.8 million on February 2, followed by $272 million in outflows on February 3.
Once institutional demand stabilizes, Binance’s marginal sales role may fade.
In a bearish case, Binance will continue to dominate negative net taker flows, liquidity will decrease and premium volatility will increase. Segmentation increases.
The driving forces behind this scenario exist. CoinShares reported over $1 billion in Bitcoin outflows for the week ending January 23rd. If outflows continue, Binance could remain a marginal seller for several weeks.
In stress cases, premiums persist and widen as arbitrage balance sheets are constrained. Pipe clogs and price discovery become more concentrated.
This reflects a narrative around USD/USDT frictions, funding costs, and transfer constraints. Reuters reported that Binance's CEO described the broader drawdown in late 2025 as deleveraging, a system in which forced selling rather than opportunistic buying determines prices, alongside risk aversion.
The calculation on the napkin shows the leverage at play. If Binance is willing to sell even a portion of the $4.3 billion inflow while its cash depth is thin, it could potentially set the price limit for the market.
The point is not that Binance “crashed” Bitcoin, but that once a venue captures a large portion of the negative taker flow, arbitrage forces other venues to reprice around that venue.
| scenario | Trader View Sell Pressure Share | CoinGlass Coinbase Premium Index | Market depth 1% | Perp risk proxy (OI concentration/funding stress) | etf flow tape | “tell me” |
|---|---|---|---|---|---|---|
| Base case: connection is restored | Binance share materially fall From extreme; selling pressure disperse throughout the venue | premium compresses towards ~0 and Reduced volatility;deviation return to meanness immediately | depth stabilize or rebuild;Impact on imbalance per sales unit shrink | funding normalize;Oxygen concentration alleviate;reduced forced hedging | flow stabilize / turn positive;outflow stripes break | Premium snaps back within minutes. Binance will stop “printing” dumps for others. |
| Bear case: Binance remains a marginal seller | Binance share will be maintained expensive (Dominant negative taker flow) Even if the volume share does not increase | premium choppy;then compress spread again;Return to mean Slower | depth sharpen lower In the risk-off window. small shock raise the price further | funding distort negatively More often; stay OI high/clustered;Hedge demand continues | Mixed to negative tape. repeated spills keep applying pressure | It's the same movie almost every day. Binance leads the decline, with other companies subsequently rounding up prices. |
| Stress Case: Segmentation/Clogged Pipe | Binance's share will remain very high or become unstable one-way burst | premium spread and persist (structural shift), volatility spikemeans return break | depth collapse (especially during off-peak hours); higher liquidity fragile | funding dislocate;Oxygen concentration spike;Liquidation risk increases | continuous spill streak;Risk-off system prevails | Premium stops “snapping back”. Venues will fall apart and price discovery will be concentrated where liquidity survives. |
plumbing questions
The story isn't that Binance is doing anything unusual. The story is what happens when marginal sellers in a market sit in a venue that drives price discovery, dominates derivatives, and entrenches arbitrage.
ETF flows are important because they change who the marginal sellers are, including authorized participants and market makers, and where that selling appears.
Stablecoin plumbing is important because BTC/USD vs BTC/USDT is not a clean spread, but a structural difference in the movement of the dollar. For this reason, Kaiko positions stablecoins as the core infrastructure of the market.
When risk-off occurs, deleveraging and reduced liquidity often explain more than a single exchange's order flow. However, the mechanism by which deleveraging is reflected in prices requires a limited number of sellers.
This week, that seller appears to be Binance. It's not because they manipulated anything, it's because the market is where you go to find out the price of Bitcoin.
