Binance Bitcoin balance rise could be mistaken for selling, Coin Metrics warns
A larger reported Binance balance does not mean coins were sold
Bitcoin was near $76,000 ahead of Tuesday's US inflation report. CryptoSlate quoted Bitcoin at $75,871 at 10:42 UTC on Nov. 7.
Data provider Coin Metrics has warned that a higher reported Binance balance may not show new selling. Binance is an exchange, a platform where crypto is traded. A wallet is a place where crypto is held. Coin Metrics said wider coverage of Binance wallets could make the reported balance look larger, even if no fresh coins arrived.
Three points from the Coin Metrics notice
- Coin Metrics issued a notice on Nov. 4 about an update to its Binance Bitcoin data.
- The update could raise some supply readings because more exchange addresses are included.
- A balance or a deposit shows coins at or moving to an exchange. It does not prove the coins were sold.
What Coin Metrics said on Nov. 4
Coin Metrics said it planned to update its exchange-address data after more addresses were disclosed. It expected significant increases in some hourly supply readings on Nov. 4 and in daily readings on Nov. 5, mainly for Binance Bitcoin measured in coins and in US dollars.
The provider said the change would reflect broader address coverage. It said actual exchange holdings would not change in the same way. The notice did not give a size for the increase.
Supply, deposits and trades show different things
Coin Metrics counts exchange supply from balances in identified hot and cold wallets at the end of a time period. Hot wallets are connected to the internet. Cold wallets are kept offline. The provider also warns that undiscovered addresses can make its measure lower than actual holdings. Finding another wallet can therefore raise what the data shows, without proving that a customer just deposited more Bitcoin.
The dollar value of supply uses the coin balance and the US dollar price. A rise in the dollar value alone cannot show that the number of coins rose.
Deposits are different. Coin Metrics defines deposits as assets sent to identified exchange addresses during a period. A deposit shows a transfer. It does not show a sale.
Trade records are different again. They include the time, price and amount of a trade. Where known, they also show the taker's side. A sell taker is an incoming sell order that takes a standing buy order. That shows aggressive selling, not just coins held on an exchange.
Past data can also change. Coin Metrics said standard exchange histories may be revised when new addresses are found. In point-in-time histories, past values stay fixed, but new addresses enter the data from the date they are found. That does not make every date fully comparable.
What a separate Binance trading report said
CryptoSlate's Nov. 7 report cited CryptoQuant analyst Darkfost. He described more aggressive spot selling than buying on Binance and Coinbase. Spot selling means selling crypto for immediate delivery at the current market price.
That trading signal is separate from the Coin Metrics coverage notice. The notice does not cancel or disprove the trading report, because it concerns a different measure.
What is confirmed and what is still unclear
It is confirmed that Coin Metrics expected higher Binance Bitcoin supply readings from expanded coverage. It is also confirmed that supply, deposits and trades measure different things.
It is still unclear how large the rise in reported supply was. Coin Metrics did not quantify the increase in the notice. It is also not possible to tell from a balance chart alone whether holders moved coins to an exchange or sold them.
Why the distinction matters before Tuesday's inflation report
Traders are looking for evidence of demand before the inflation report. A balance rise caused by wider coverage could look like coins moving to an exchange for selling. Trade data is needed to check whether selling actually took place.
What traders will compare next
Tuesday's US consumer price index, or CPI, release gives a set time to compare flows, spot selling and the price response. That comparison may show whether buyers absorbed any selling.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.