Ether (ETH), the native coin of the Ethereum blockchain, is seeing a high degree of concentration on Binance crypto exchange. The trading platform emerged as the dominant venue of exchange-level flows during ETH’s latest descent below $2,100.
Binance sees concentration of ETH inflows
Fresh exchange data from Binance shows the exchange’s dominance in terms of being the go-to platform for cryptocurrency trading. Specifically, on May 10, the trading avenue absorbed 225,000 of the 250,000 ETH that was deposited across all exchanges.
To be exact, the exchange pulled 90 percent of the total ETH sent to all exchanges that day. The scale of such concentration suggests that ETH’s price movements are getting increasingly tied to activity on one major exchange rather than distributed across multiple exchanges.
This concentration of ETH on Binance becomes all the more important when viewed against the backdrop of the altcoin’s recent price action. The top altcoin by market cap has tumbled by 15.47 percent since its latest high earlier this month.
It is worth highlighting that since the aforementioned ETH concentration on Binance, the digital asset’s flow structure has begun to diverge. For example, following the initial inflow spike, Binance has moved into a net-outflow position. As of Monday, it is registering around -12,000 ETH.
In sharp contrast, the aggregate across all other crypto exchanges is in a positive territory – around +20,000 ETH. The divergence shows that although Binance initially absorbed the bulk of the incoming ETH supply, it is now see the altcoin flee its platform.
That said, the rest of the market still continues to see ETH deposits, indicating that other exchanges have not yet fully mirrored Binance’s change in exchange flow.
To sum it up, the difference between Binance and other exchanges’ ETH flows confirms the crypto market’s fragmented liquidity structure, compared to traditional finance’s unified market-wide trend.
Is the market preparing for distribution?
ETH’s recent price drawdown below $2,100 was not supported by a broad, uniform exchange inflow. Rather, it was led by a very specific concentration on Binance crypto exchange.
This dynamic matters, because Binance is one of the deepest liquidity venues for ETH.
When a cryptocurrency’s inflows concentrate on Binance, it usually signals the beginning of the underlying asset’s distribution phase, which can put further pressure on its price. The observation aligns with another exchange data point which found that retail traders are selling ETH heavily on Binance.