• On-chain data shows renewed buying interest and lower supply on Binance, driving Bitcoin’s recent price increase.
• Open Interest and active addresses also suggest stronger market participation and potential for further gains.

Bitcoin [BTC] has been on a volatile path since the start of the year. Following an early rally, the cryptocurrency faced a sharp correction that left many investors uncertain about the market’s direction. 

However, a recent surge on the 20th of January pushed Bitcoin’s price to a new all-time high, briefly breaking above $109,000.

Although the asset experienced a slight pullback, trading at $107,945, it remained up by 3.5% in the last 24 hours, reflecting a double-digit gain over the past week.

Amid this price activity, analysts have been closely monitoring key on-chain metrics.

According to one CryptoQuant analyst, the Binance Netflow SMA30—a 30-day moving average of netflows on Binance—has offered valuable insights into market sentiment and price trends.

The analyst points out that shifts in this metric often correlate with notable price movements, indicating that the current rally may have more room to run.

Bitcoin netflow trends and market dynamics

The Binance Netflow SMA30 metric has historically been a useful indicator for anticipating Bitcoin’s short-term price direction.

When the metric enters positive territory, it often signals increased selling pressure as more Bitcoin flows into Binance. 

For example, in May 2024, a positive Netflow SMA30 coincided with a drop in Bitcoin’s price from $71,000 to $50,000, highlighting a period of elevated supply and bearish sentiment.