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As Bitcoin shows signs of a rebound, the amount of “tradable supply” on Binance has risen to 2024 levels, signaling another potential wave of volatility.
According to crypto media outlet Bitcoinist on March 1 (local time), on-chain analytics platform CryptoQuant’s Arab Chain reported that Binance’s Bitcoin (BTC) liquid supply has recently increased significantly through its “BTC Binance Liquid and Illiquid Supply Model.” This metric distinguishes between Bitcoin held on exchanges that is immediately available for trading (liquid supply) and inactive holdings characterized by long-term storage (illiquid supply).
Binance currently holds a total of approximately 670,000 BTC. Of this amount, about 83,000 BTC is classified as liquid supply, while roughly 587,000 BTC is categorized as illiquid supply. The liquidity ratio stands at around 12%. Notably, the scale of liquid supply has risen to levels similar to those seen in 2024. However, illiquid supply still overwhelmingly exceeds liquid supply relative to total holdings, indicating that most Bitcoin on the exchange continues to reflect long-term holding behavior.
Arab Chain explained that the structure, in which illiquid holdings significantly surpass liquid holdings, helps offset expected selling pressure to some extent. In other words, because the amount of Bitcoin immediately available for sale is relatively small compared to total holdings, the risk of a sharp short-term sell-off may be limited.
However, the gradual increase in liquid supply is a noteworthy development. Liquid supply typically expands alongside speculative activity and tends to grow as trading intensifies. Conversely, it generally contracts when the market becomes quiet or enters a consolidation phase. If this rise in liquid supply leads to increased selling pressure, it could be interpreted as a signal of a distribution phase. On the other hand, if demand absorbs the additional supply, the price recovery could continue.
According to CoinMarketCap, as of the time of writing, Bitcoin was trading at $66,517, up 3.9% over the past 24 hours. Amid the short-term rebound, market participants are closely watching whether the increase in exchange liquid supply will signal greater volatility ahead or be absorbed by strong buying momentum.
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