Liquidity Tug-of-War on Binance Could Push Bitcoin (BTC) Into Its Next Bullish Leg

Bitcoin’s liquidity tug-of-war enters a critical phase on Binance, which happens to be the exchange with the deepest order books.

With BTC’s price already showing strength a little below its all-time high level, the current liquidity battle on Binance may not just be noise – it could be the early signal of the next bullish leg.

Binance Flashing a Bull Market Trigger?

CryptoQuant explained that in early August, Binance’s refill_30d indicator, which tracks the 30-day rolling inflows of Bitcoin to the platform, climbed sharply and repeatedly outpaced the drain_30d indicator, which measures withdrawals. This influx of BTC, particularly strong between August 4 and 18, meant that traders were preparing for distribution or hedging as Bitcoin’s price neared $120,000.

But after peaking, inflows declined in the second half of the month, in what appeared to be reduced selling intent and waning momentum. By mid-August, both drain and refill indicators had entered equilibrium, indicating a temporary balance in trader behavior and contributing to a phase of relative price stability.

The change yet again in early September, when the drain_30d indicator surged past 22 million, one of the highest levels seen in recent months, while refills stayed muted. This divergence is important since it points to renewed withdrawals of BTC from Binance, reducing exchange liquidity and potentially tightening supply. When exchange liquidity dries up and demand stays firm, the market can tip into sharp rallies fueled by scarcity.

What’s Next For BTC

What’s crucial is that despite these oscillations in liquidity, Bitcoin’s price has remained relatively steady, which can be attributed to the market absorbing both inflows and outflows with minimal disruption.

Looking ahead, the imbalance between rising outflows and weak inflows could tilt the scales. If drains continue to rise while refills remain low, Binance may face a liquidity squeeze that intensifies buying pressure. Such conditions can set up the possibility of an imminent rally.