Binance sees 80% drop in deposits

Data from CryptoQuant shows that daily Bitcoin deposits from wallets of less than 0.1 BTC fell from 552 BTC to just 92 BTC.

New data has revealed a sharp drop in activity by small Bitcoin (BTC) investors on major trading platforms, with Binance seeing an 80% collapse in daily deposits from this group since the beginning of 2023.

Some market observers see this shift as a fundamental shift in market structure, where traditional retail participation is being replaced by institutional vehicles and long-term holding strategies.

The big retail recall

According to an analysis shared by CryptoQuant analyst Darkfost, the flow of Bitcoin to Binance from addresses holding less than 0.1 BTC, often called “shrimp,” has fallen off a cliff.

The 90-day moving average of daily deposits from these small holders has dropped more than five-fold, going from about 552 BTC in early 2023 to just 92 BTC now. This trend accelerated further after spot ETFs began trading in January 2024. Before their launch, the daily average was around 450 BTC, meaning the drop to 92 BTC represents a steep and continued drop.

Darkfost identified three main factors driving this collapse. Firstly, he stated that a portion of retail investors now prefer to gain exposure to Bitcoin through ETFs, completely avoiding the need to use an exchange like Binance. Second, small Bitcoin holders are choosing to hold it in their wallets rather than sell it on an exchange.

Finally, he suggested that the data no longer include consistent accumulators who have simply increased their holdings beyond the “shrimp” category. The result is a market increasingly driven by new large holders, corporate treasuries and firm accumulators, making this cycle distinctly different from those of the past.

A market in search of direction

The changing retail landscape comes even as the broader market shows signs of fatigue. At the time of writing, Bitcoin was priced at $107,133, down 3.2% in the last 24 hours and down 6.8% in the last week.

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It follows a difficult October, with CoinGecko data showing the asset fell more than 12% over the past month and, in the process, helped break a long streak of positive performances in October.

Other data supports a cautious sentiment. A report from CryptoQuant noted that demand for exposure to BTC and ETH has softened among US investors, with Bitcoin ETFs recording net outflows of over 280 BTC and inflows to their Ethereum counterparts reaching almost zero. Meanwhile, momentum indicators on Binance, such as CVD, have retired from the October highs, pointing to a possible loss of bullish strength.

Traders are now eyeing key support levels; If the selling pressure continues, the $97,000 to $98,000 zone is considered the next big test. And while the long-term foundation remains intact, the market appears to be taking a breather and retail investors appear to be becoming more cautious.