Bitcoin Price Sees a Downside as Binance Halts and Resumes BTC Withdrawals

Pathik Bhattacharya
Pathik Bhattacharya
Published on May 08, 2023 08:56 AM

Exchange of cryptocurrencies Binance reopened bitcoin withdrawals on Monday after suspending them for the second time in a day due to high traffic.

bitcoin price tumbles after heavy withdrawals
Source: Unsplash

Bitcoin price has tumbled three days straight lately after the FED meeting on May 2-3. Monday marks the third day of BTC losing pace and trending downwards due to Binance's halt to BTC transactions. The BTC withdrawals have been halted two times within a single day as a large volume interfered with the transaction anomaly. 

Binance noted in the tweet, "We've temporarily closed #BTC withdrawals due to the large volume of pending transactions. Our team is currently working on a fix and will reopen $BTC withdrawals as soon as possible. Rest assured, funds are SAFU."

This partially created a Havoc in the market and the enormous transaction volumes created another red candle. Let's see how the Bitcoin price moved afterwards.

Binance Records Largest BTC Withdrawal in History

While things weren't going in the right direction, Binance's Bitcoin outflow records the highest possible mark on the graph as per CryptoQuant. Binance outflow data shows the highest withdrawal in the exchange's history, with over 162,000 $BTC leaving the exchange, worth over $4.6 billion.

bitcoin exchange outflow- binance graph

Source: CryptoQuant

“There is a large volume of withdrawal transactions from Binance still pending as our set fees did not anticipate the recent surge in (bitcoin) network gas fees,” - Binance had previously tweeted about payments provided to crypto miners who execute blockchain transactions.

The record-breaking withdrawal resulted in the exchange netflow (Total) for all exchanges to nosedive in a matter of hours. Hence Bitcoin came down to $27K.

bitcoin exchange netflow

Source: CryptoQuant

Recently, Bitcoin is facing high transaction fees also. As reported earlier by TMC, the total fees paid on the Bitcoin-based blockchain were roughly $3.5 million on May 3, 2023, marking a 400% increase over last April. According to YCharts, the average Bitcoin exchange rate is $7.2. 

Dylan LeClair, a Bitcoin-maxi, agreed that high transaction fees may be used as an "attack vector" against Bitcoin. However, he asserted that driving up expenses in the near term had no long-term impact on Bitcoin.

Bitcoin Technical Analysis: Daily Chart

At the press time, Bitcoin (BTC) price is trading at $28,215.70, with a 24-hour trading volume of $12,285,008,806. This indicates a -2.46% drop in the last 24 hours and a -3.91% drop in the previous 7 days. Bitcoin has a market valuation of $546,457,974,742 with a circulating supply of 19 million BTC.

Right now, if we observe the graph precisely, it could be seen that the price action is somehow making a Head & shoulders pattern. Not clearly, but at least if the peaks and valleys are considered. This indicates that a bearish moment is soon going to approach the market. Although the price correction has already happened it's still not making a clear picture. 

If the support is considered, the $27,902 mark is crucial for the upcoming days. If BTC breaks this point, prices could fall severely afterwards and if not then the consolidation will make progress. 

at the press time, the RSI is at 46 which indicates a neutral market. Moreover, the stoichiometric line is going downwards indicating the bears are dominating the BTC price. However, the 14-day RSI is moving opposite the price pattern. The pattern which is in making is of Declining pattern which suggests a higher high in future. As per the predictions and analysis, it could be said as "If prices go down as per the Head & Shoulders pattern, the RSI will move downward due to heavy sell-off which will then carry forward with Holders and bulls at last for the BTC to rise again".

The MACD is looking bearish and exhibiting red histograms which show bearish pressure.

bitcoin price chart

Source: TradingView


In conclusion, Bitcoin is facing heavy withdrawals at the moment due to Binance BTC withdrawals. The overall market sentiment is pointing towards the "Sell" notion. However, the network activity has risen in the Bitcoin ecosystem which is a positive sign.

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