Key facts:
- Trading volume on Binance.US is down 76% compared to May.
- It was an isolated event that occurred in the early hours of this Wednesday.
The bitcoin price reached USD 138,000 on the Binance.US exchange at dawn on Wednesday, June 21.
It was at 6:50 AM (UTC time) when, for a few seconds, the price of the main digital currency against the stablecoin tether (USDT) reached that number. Then, it resumed its “normal” price (that is, the one generally accepted by the market).
The main reason for this drastic fluctuation in the bitcoin price on Binance.US was the low liquidity that the platform is currently experiencing. This phenomenon is the result of recent lawsuits that the United States Securities and Exchange Commission (SEC) has filed against that company, accusing it of allowing the trading of unregistered securities. Many users of the US subsidiary of Binance withdrew their funds from the platform, given the possibility of a money freeze or bankruptcy of the company. It is worth clarifying that neither of these two things has happened with Binance, at least so far.
Liquidity, in simple terms, refers to the ease with which an asset can be bought or sold in the market without affecting its price. A market is a liquid when there are enough buyers and sellers to allow smooth transactions without large price changes. Conversely, when a market is low liquidity, there are fewer buyers and sellers available, which can lead to extreme price volatility. In this case, any purchase or sale operation can have a significant impact on the price of the asset.
In this case, the bitcoin price may have reached $138,000 due to a buy trade at a time when there was a limited amount of bitcoin available for sale. This trade may have pushed the price up, but only temporarily, as it then returned to its “normal” value once the trade was completed and the balance between buyers and sellers was restored.
Something important to clarify in this is that the price movement occurred in the US affiliate of the exchange and not in international Binance. As reported by Market Times, it is a company created in 2019 with the aim of specifically complying with the regulations and regulations of the United States regarding the trading of cryptocurrencies.
