Supply Squeeze: Bitcoin Reclaims $90,000 as Binance Inflows Hit 4-Year Low

Bitcoin briefly surged past $90,000 on Jan. 28 before retreating to trade between $89,300 and $89,600, with market cap peaking at $1.78 trillion.

Contradicting ETF Trends

Bitcoin briefly surged past the $90,000 milestone Jan. 28, fueled by reports that bitcoin transfers to Binance—the world’s largest cryptocurrency exchange—have plummeted to a monthly average of 5,700 $BTC. This marks a four-year low in exchange inflows. Following an intraday low of $87,000, the rally represented a 2% jump, though the asset faced immediate resistance.

After breaching $90,000, bitcoin retreated and oscillated between $89,300 and $89,600, with daily trading volume remaining relatively subdued below $50 billion. At its intraday peak, bitcoin’s market capitalization swelled by approximately $40 billion, reaching a total valuation of $1.78 trillion by 1 p.m. EST.

This price recovery occurred despite cooling interest in spot bitcoin exchange-traded funds. Following a meager $6.86 million in net inflows Jan. 26, the sector flipped red. Data shows a net outflow of $147.37 million, with Blackrock’s IBIT leading the exodus with $102.81 million in redemptions. In recent weeks, these institutional outflows have typically served as a leading indicator for downward price trends, making today’s resilience particularly notable.

Read more: Bitcoin Stalls at $89K as Consolidation Continues: Will the ‘February Factor’ Break the Deadlock?

A Structural Shift Toward Long-Term Holding

The market’s positive reaction is largely attributed to the collapse in Binance transfers, which have dropped by more than half from their historical average of 12,000 $BTC. In on-chain analytics, a decline in exchange deposits typically suggests that investors are moving assets into cold storage, signaling high conviction and a preference for long-term holding over immediate selling.

What makes this supply squeeze significant is its timing. Bitcoin is currently recovering from a 30% drawdown since its Oct. 6 all-time high of just above $126,000. Analysts suggest this is not just a momentary blip; according to social media commentator Darkfost, the trend is becoming a permanent fixture of the market.

“For several months now, inflows have remained consistently below the historical average of 12,000 $BTC,” Darkfost noted on X, the platform formerly known as Twitter. “This suggests the current dynamic is becoming structural rather than temporary.”

As of Jan. 28, bitcoin’s technical landscape presents a tug-of-war between short-term bearish exhaustion and long-term structural strength. While the “Binance supply crunch” provides a fundamental floor, the charts suggest that $90,000 remains a formidable psychological and technical barrier.

Technical Indicators: A Tug-of-War

Bitcoin is currently trading just below its 50-day exponential moving average and 200-day exponential moving average on several timeframes. On the daily chart, price action is “sandwiched.” Staying above the $84,000 to $87,000 support zone is keeping the long-term bullish structure intact, but failing to close decisively above the $91,400 moving average keeps the bears in control of the immediate trend.

Traders are watching for a reclaim of the $95,000 level, which would signal a shift back to a “strong buy” regime. The relative strength index is currently hovering around 64.5, which is in neutral-to- bullish territory.

Overall, the indicators suggest that bitcoin is in a consolidation phase. While the low exchange inflows are preventing a crash, the lack of aggressive ETF buying is preventing a “moonshot.” The market is currently waiting for a catalyst—likely the upcoming Federal Reserve policy decision—to decide which way the wedge breaks.

FAQ ❓

• Why did bitcoin surge past $90,000? A sharp drop in Binance inflows to a four‑year low fueled the rally.
• What happened after the $90,000 breakout? Bitcoin retreated to trade between $89,300 and $89,600 with subdued volume.
• How are ETFs impacting bitcoin’s trend? Spot Bitcoin ETFs saw $147M in net outflows, led by Blackrock’s IBIT redemptions.
• What levels are traders watching now? Support holds at $84K–$87K, while reclaiming $95K could trigger a strong buy signal.