Cryptocurrency Exchange Market Review: Tokenanalyst & Zerononcense Analytical Research Report Pt. 1
This research report, by Zerononcense, is being conducted in partnership with the cryptocurrency data analytics firm, Tokenanalyst (owner of the website, Tokenanalyst.io).
You can find the Twitter account here:
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Recently, Zerononcense reached out to Tokenanalyst to inquire about receiving more data and graphics from Tokenanalyst that is not currently on its site.
Fortunately, the leaders at Tokenanalyst were gracious enough to lend this data in the form of API/CSV and via their patented graphics to assist Zerononcense in the curation of this research paper.
In this multi-part research study, we will be looking at various metrics from Tokenanalyst, such as:
- 24-hour Exchange On-chain Inflows/Outflows for Bitcoin
- 24-hour Exchange On-chain Inflows/Outflows for Ethereum
- 24-hour Exchange On-chain Inflows/Outflows for Stablecoins (all of them)
- 24-hour Exchange On-chain Inflows/Outflows for (ERC20)
- Ethereum Inflow/Outflow for Poloniex throughout the month of May.
- Ethereum Inflow/Outflow for KuCoin throughout the month of May.
- Bitcoin Inflow/Outflow for Poloniex throughout the month of May.
- Ethereum Inflow/Outflow for Bitfinex throughout the month of May.
- Bitcoin Inflow/Outflow for Bittrex throughout the month of May.
- Ethereum Inflow/Outflow for Bittrex throughout the month of May.
- Ethereum Inflow/Outflow for Kraken throughout the month of May.
- Bitcoin Inflow/Outflow for BitMEX throughout the month of May.
*Stablecoin Analysis Will Be in ‘Part 2’ of the TokenAnalyst / Zerononcense Collaborative Research Report*
For the first portion of this research, all data will be extracted directly from the TokenAnalyst site (as well as from visual graphics provided by Tokenanalyst as a supplement).
Sidenote About Inflow/Outflows
Its worth noting that general convention states that increased inflows generally foreshadow an impending sell-off. This logic stems from the idea that users that intend on selling their holdings will be sending their funds to exchanges in order to do so.
Conversely, a large exodus of funds from an exchange could signal that users are looking to keep their holdings “safe” as they wait for it to appreciate in value.
Of course, neither of these theories have been concretely proven and this is far from an exact science, the logic behind these ideas is rational, at least. Thus, readers should keep this in mind when viewing the metrics in this section and others.
Examining Bitcoin 24hr Exchange On-chain Inflows/Outflows
For this portion of the report, we’re going to consult the link: https://www.tokenanalyst.io/exchange
Upon visiting, visitors should see:
What’s notable in the picture above is the sharp dropoff for Binance, Bitstamp, Bitfinex, BitMEX, and Poloniex for inflows. However, there seems to have been a slight uptick for Bittrex, in specific. We will take a greater look at each of the aforementioned exchanges to get a better idea of what these changes in value mean in context.
Outflows have also decreased, somewhat significantly, for all of the aforementioned exchanges. When juxtaposing this fact with the sharp decrease in Bitcoin inflows into these exchanges, the safest conclusion to make here is that there has been a general decrease in the overall market volume.
Bitcoin Inflow/Outflow Data for Exchanges Diverges Significantly With Reported Volume on Market Tracking Websites (CoinMarketCap, CoinGecko, etc.)
However, reported market volume for Bitcoin on sites such as CoinGecko do not reflect this information (for some reason):
As one can see in the graphic posted above from CoinGecko, there is hardly any fluctuation in Bitcoin’s volume over the last 24 hours
Specifically, the volume has only decreased by approximately 4%, dropping from a 24H circulating volume of $25 million to $24 million in that time span.
CoinMarketCap 24H Bitcoin Volume Data
The reported 24H volume for Bitcoin is slightly different (lower than that of CoinGecko’s), but it tells a similar story of hardly any fluctuation over the last 24 hours.
Specifically, the floating 24H trade volume for Bitcoin was $23.9 million and currently, it is reported as $21.4 million, an approximate 10.4% decrease.
Of course, this total pales in comparison to the overall drop in activity at some of the most used exchanges in the cryptospace (displayed on the tokenanalyst.io website).
Similar Patterns in the Total Aggregate Cryptocurrency Volume Metrics
Notably, the reported 24-hour volume for CoinGecko ($57 million approximately at the time of writing) is markedly different than what can be seen on CoinMarketCap ($72 million).
Below are the values reported by CoinMarketCap:
As we can see above, there was a slight fluctuation in the volume for the entire crypto market reported.
CryptoCompare Bitcoin 24H Volume Data
The reason why the volume in the chart above looks markedly different than what can be seen from the other two websites mentioned in this report (CoinMarketCap and CoinGecko) is because the above graph shows the difference in volume on an hourly basis.
The report doesn’t have a proposed reason for why there are sometimes random spikes in volume on the chart at various points throughout the day.
For example, there was $8.196 million worth of volume at 4:20 p.m. on June 5th, 2019 (GMT), however in the minutes prior the volume was as low as $723,000 in trading.
These unnatural spikes lend significant credence to theories of market manipulation in its highest form. These spikes in volume also provide a significant amount of evidence to corroborate the idea that high frequency algorithmic bots are used as well.
Examining Bitcoin Inflow/Outflows at Specific Exchanges
Bitcoin Inflows (24 hours)
- Binance = -63.91%
- Bitstamp = -33.10%
- Bitfinex = -49.69%
- Bittrex = +10.69%
- BitMEX = -50.94%
- Poloniex = -42.66%
- Binance = -6.67%
- Bitstamp = -20.25%
- Bitfinex = -31.20%
- Bittrex = -24.27%
- BitMEX = -44.03%
- Poloniex = -26.84%
Examining Binance’s Inflow/Outflow for Bitcoin
Below are screenshots of the related metrics from the Tokenanalyst website:
One thing that’s worth noting is that the inflow of Bitcoin to Binance has dropped off significantly.
For June 5th, thus far, there were only 1,273 Bitcoins that traveled to the exchange, while in the day prior, 7,760.99 bitcoins had made their way to Binance’s exchange.
What’s worth noting is the spike in Bitcoin outflow preceding a sharp rise in Bitcoin’s price.
As seem below, there was an exodus of 20,000+ Bitcoins from Binance’s exchange on May 16th, 2019:
Over the next 8 days, the price spiked 10.7% to reach its localized high of $8,800 (approx.) on May 24th, 2019.
Divergence in Binance Inflow/Outflow Sender Ratio and Actual Inflow/Outflow (Bitcoin)
As one can see in the Bitcoin inflow/outflow charts for Bitcoin specifically, outflows have significantly outnumbered inflows on every period seen above over the last 30 days (i.e., there has been more Bitcoin leaving Binance than entering).
30-Day Bitcoin Inflow-Outflow Data for Binance:
Total Outflows = 233,017 Bitcoins (7,281 daily average)/$1,819,929,907 USD value
Total Inflows = 129,123 Bitcoins (4,035 daily average)/$1,025,204,713 USD value
Net Difference = -103,894 Bitcoins (-3,463 bitcoin daily average)/-$794,725,194 USD Value
Despite the fact that there was a net exodus of -103,894 bitcoins from the Binance exchange in the last 30 days (representing an $800M exodus), there is significant disparity in the total senders into and outside of the exchange.
At various points, such as on May 30th, there was a significant discrepancy in the number of senders sending Bitcoins into Binance and those sending Bitcoins out of the exchange.
Specifically, on May 30th the Sender Data for Binance on Tokenanalyst reflects:
- # of Senders into Binance (Bitcoin) = 27,364
- # of Senders out of Binance (Bitcoin) = 9,935
However, on May 30th, the Inflow/Outflow Data for Binance on Tokenanlyst reflects:
- Inflow of Bitcoins = 8,215.1
- Outflow of Bitcoins = 12,188.7
This discrepancy is notable because it persists throughout the last 30 days for Binance.
Which begs the questions of — why?
Again, this report does not have an answer, but the exodus of over 100k bitcoins from Binance throughout the month of May and early June, is absolutely worth noting.
As a side note, the total number of transactions are down significantly as well today (June 5th) vs. where it has been in times previous:
From the 30-day high (May 16th, 2019) to the latest data available, there has been a -79.8% dropoff in total transactions.
However, again, when viewing the actual market volume data, there isn’t nearly as much of a decrease for Bitcoin data, in specific.
Over the same time period that was tracked above for Binance, in specific, a -38.24% drop in volume.
While the drop is notable, it is nothing in comparison to the dropoff in literal transactions of Bitcoin (inflows/outflows + senders in and out of the exchange itself).
Check back for part 2 of our analysis.