BTC Floods Binance: Inflow Sparks Selling Pressure FUD Amid Crypto Market Turbulence

Bitcoin's river of capital just changed course—straight into an exchange vault. That's triggering alarm bells across crypto forums.

The Whale Watch

On-chain sleuths spotted a massive, single-wallet transfer. The destination? A Binance deposit address. This isn't pocket change moving to pay for a latte; it's the kind of volume that makes trading bots twitch. Historically, large inflows to centralized exchanges precede sell-offs. The logic is simple: you don't send coins to an exchange to HODL in a cold wallet. You send them to trade.

FUD's Ripple Effect

The data hit social media, and the fear, uncertainty, and doubt (FUD) machine roared to life. 'Whale dumping' narratives trended. Leveraged longs got nervous. A minor dip in BTC price amplified the selling pressure narrative, creating a self-fulfilling prophecy. Retail sentiment, always a lagging indicator, flipped from greedy to fearful in hours. It's the market's oldest story: big money moves, small money panics.

Beyond the Headline Noise

But let's cut through the panic. Not every inflow is a prelude to a fire sale. Could it be collateral for a lending position? Preparation for a large OTC purchase? The crypto intelligence game is parsing intent from transaction logs—a famously imperfect science. Yet, in a skittish market, perception often trumps reality. The mere suggestion of selling pressure can become the pressure itself.

The market's now stuck in a classic tug-of-war. On one side, the raw on-chain data pointing to potential distribution. On the other, the broader macro thesis for digital assets remains intact. Today's drama is a stark reminder: in crypto, liquidity is a double-edged sword. Easy to enter, terrifying to watch leave—especially when it's headed for the exit all at once. It's enough to make you nostalgic for the days when moving this much money required a banker's hours and a three-piece suit.

Bitcoin enters a capitulation phase

Dear Binance FUDers, great job. You triggered a $600M net outflow rush, a whopping 0.3% of their total reserves. https://t.co/9JWgjrmKE8 pic.twitter.com/pXPUyC4aSz

— Ki Young Ju (@ki_young_ju) February 3, 2026

One analyst argued that a break below that level WOULD technically call the long-term trend into question. The analyst noted that as BTC approaches such a critical level, it creates panic among some investors, causing them to move their digital assets to Binance.

Short-term BTC holders also contributed to the inflows sent to Binance. On-chain data showed that the cohort of holders sent around 54,000 BTC to Binance, incurring a loss, on February 2 alone.

Large BTC inflows to Binance have historically represented real selling pressure on the spot market. The analyst suggested that, despite the FUD that usually accompanies such panic phases, the current selling pressure is not abnormal given the scale of the recorded flows.

The analyst stated that the current flows into Binance suggest that the market is entering a phase of capitulation and panic as BTC becomes oversold. He also noted that such context has historically enabled the formation of a bottom, both in the short-term and over longer horizons. Glassnode data also showed that Bitcoin’s Realized Profit/Loss Ratio is nearing 1, a level that’s historically been linked to market capitulation.

At the time of publication, Bitcoin is trading around $75,630, down more than 3.3% in the previous 24 hours. BTC has also dropped by nearly 15.4% over the last 7 days and 18.55% in the last 30 days. Bitcoin has already entered its 5th consecutive month of correction.

“Bitcoin is dropping as selling pressure persists, with no fresh capital coming in. Selling pressure is still ongoing, so the bottom isn’t clear yet, but this bear market will likely FORM a wide-ranging sideways consolidation.”

–Kim Young Ju, Founder of CryptoQuant.

On-chain data showed that BTC spot volumes have dropped by more than 50% since the October 10 event, which led to a massive liquidity drain. Binance still holds the largest share of BTC spot volumes at $104 billion. 

The analyst argued that the contraction in volumes has brought the market back to levels among the lowest observed since 2024. He also suggested that the contraction in volumes indicates apparent disengagement by investors in the crypto market and, consequently, weaker demand. 

Bitcoin funding rates on Binance drop below 0.01%

BTC funding rates on Binance have moved deeply into negative territory, currently at -0.0045, suggesting that short dominance in the market is surging. Binance applies a 0.01% interest rate in its funding rate formula, meaning the neutral funding rate when analyzing market dominance is 0.01% and not 0. 

On-chain data suggests that shorts are currently dominating since the funding rate is below 0.01%. The analyst argued that funding rates on Binance are entering an extreme zone, signaling an accumulation of short positions and bearish momentum among investors. He also believes that the current market position has historically preceded trend reversals.

Young stated on Tuesday that the Binance FUDers triggered a $600 million net outflow, representing 0.3% of their total reserves. On-chain data showed that many users were closing their Binance accounts, triggering a withdrawal crisis on the crypto exchange. Binance acknowledged that it has observed some technical difficulties affecting withdrawals on the platform, and its team is working on a fix.

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