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Bitcoin Price Tied to Battle Between Binance and Coinbase, Quant Reveals — TradingView News
One quant explained how there appears to be a relationship between Coinbase’s spot volume dominance over that of Binance and the price of Bitcoin.
Bitcoin reacted to Binance/Coinbase volume changes
In a CryptoQuant Quicktake post, an analyst discussed the dynamics in the cryptocurrency market resulting from the ongoing battle between Binance and Coinbase for spot volume dominance.
The quant shared a graphic below that shows how this war for dominance has played out over the past decade.
BTC News
As the chart shows, Binance has been the much more dominant one of the two platforms when considering spot volume. The exchange hosts five times the volume of Coinbase.
The analyst notes that the difference between the two would be even greater if one were to consider the BTC-FDUSD pair, which is not included in the data depicted in the chart above.
Despite the much lower spot volume, Coinbase is still not irrelevant in the market. For example, the platform is the custodian of Bitcoin spot exchange traded funds (ETFs) such as BlackRock’s IBIT and Grayscale’s GBTC.
There also appears to be an interesting pattern between the dominance of the US stock market and the spot price of Bitcoin. The quant highlighted this trend in the graph.
There have been a few cases where an increase in Coinbase’s spot trading volume against Binance preceded the increase in the value of the cryptocurrency. Likewise, the decline in platform dominance has apparently led to reductions in the price of Bitcoin.
The analyst also discussed the volume trends of the two exchanges more closely, using the spot volume ratio for them, as shown below.
The chart shows that the spot volume ratio between Binance and Coinbase has reached very high levels in 2023, with the former’s volume being 53 times that of the latter. The reason for this was the zero-commission scheme that Binance had introduced for Bitcoin trading pairs.
However, Coinbase volume has recently increased, although the ratio remains significantly in favor of Binance. This shift in the market emerged as news surrounding Bitcoin spot ETFs began to intensify.
The quant concludes:
The dynamics between these exchanges are complex, but the charts show that the dominance of each exchange at specific times has a direct impact on the price of Bitcoin. It is a real battle between the largest players in the market, where competition is constant and the result is reflected in the movements of cryptocurrencies.
Bitcoin price
At the time of writing, Bitcoin is trading at around $61,800, down 3% from last week.