Fee-free Trading is Cooking Binance’s Volume Books

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  • Binance’s Bitcoin buy volume has consistently broken records in the last few weeks
  • This suggests that people are buying up Bitcoin in droves
  • However, the reason is much less exciting than that – fee-free trading

You’d be forgiven for thinking that Bitcoin is about to go parabolic if you look at the trading volume on Binance, and indeed it’s almost enough to get the uninitiated to FOMO in. The green ‘buy’ candles that have appeared in the past week or so dwarf those seen at any point in Binance’s history, and with it already being the biggest exchange by volume, this would appear to be an indicator that the good times are about to roll. However, there’s a simple explanation for this that has nothing to do with the end of any bear markets.

Binance Doing Record Numbers

Those that use Binance’s chart for the Bitcoin reference point won’t have failed to notice a spectacular amount of buying in recent weeks:


Using this 3-day chart, we can see that seven of the last 12 blocks have seen buys either equal to or, in more recent days, far greater than Binance’s previous record, set during the March 2020 crash. This astonishing rate of buying seems to show a real appetite for Bitcoin all of a sudden, but if we look at the daily chart we can see that things aren’t that optimistic:


Here we can see that the sell volume is equally as spectacular, actually otustripping the buy volume on some occasions, despite there being hardly any actual movement in price. So what’s behind this?

Whales Taking Advantage of Free Swimming

The simple answer is fee-free trading. In an attempt to get people back into the fold after the onset of the crypto winter, Binance announced that it would introduce fee-free trading on some select pairs. While this may not make a huge difference to most people, for the whales out there, this represents a huge saving – a 0.1% trading fee on a $5 million trade is $5,000. And if you execute a few of those then you’re saving a hefty amount.

This has led to whales playing games with each other, ramping up the volume as they try to outwit each other. It’s incredible that such huge volumes have come at a time when price has effectively stood still, showing that they are pretty much cancelling each other out.

We can offer more evidence for this theory if we look at the Bitcoin chart for the second biggest exchange, Coinbase:


Here we see what we would expect to see – a much more stable volume profile, with peaks at market tops and troughs during quiet times.

So next time a volume chart tempts you to buy up some fresh bags, make sure you’re not just getting in the middle of some whale games.