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Bitcoin is on track to close the year in negative territory, a development that has reinforced growing concerns among analysts who are increasingly positioning for a potential bear market ahead. After failing to sustain momentum above key psychological and technical levels, market sentiment has shifted toward caution, with investors closely monitoring liquidity behavior and exchange flows for early signals of regime change.
Recent analysis from Arab Chain, based on CryptoQuant’s Exchange Inflow Value (7-day cumulative) metric, highlights a notable divergence in liquidity patterns between major exchanges. The data aggregates Bitcoin and Ethereum inflows, providing a broader view of risk positioning across the two largest crypto assets.
On November 24, when Bitcoin was trading around $88,438, Coinbase recorded seven-day cumulative inflows totaling approximately $21.0 billion. In contrast, Binance saw lower, though still significant, inflows near $15.3 billion.
What stands out is that these elevated inflows occurred while prices were already well below prior highs. Rather than signaling aggressive accumulation, the data points to increased exchange activity consistent with portfolio rebalancing, hedging, or preparation for potential distribution.
By December 21, Bitcoin was trading near $88,635. Only marginally higher than late-November levels and still locked within a narrow consolidation range. While price action showed little progress, exchange flow data pointed to a notable shift in market conditions. Updated on-chain figures indicate that liquidity entering major trading venues declined sharply over the span of just a few weeks, underscoring a cooling in overall market activity.
Coinbase, often used as a proxy for institutional and US-based flows, saw seven-day cumulative inflows fall to roughly $7.8 billion. That represents a steep drop of more than 60% compared with inflow levels observed in late November. Binance also experienced a contraction, but the decline was materially less severe, with inflows totaling about $10.3 billion over the same period. As a result, Binance surpassed Coinbase in net inflows during December, reversing the earlier dynamic.
This divergence suggests that while broad liquidity has tightened, trading activity has become more concentrated on venues associated with shorter-term positioning and active risk management. At the same time, the absence of a significant price reaction highlights how Bitcoin has continued to trade sideways even as fresh capital flows slowed.
Taken together, the data points to a market operating with reduced turnover and lower urgency on both the buy and sell side. Bitcoin’s ability to remain range-bound amid shrinking inflows reflects a quieter, more constrained liquidity environment compared with conditions seen just one month earlier.
