Earlier today, Bitcoin dropped below $115,000 for the first time since August 6, raising concerns that this cryptocurrency's upward momentum may be weakening. In this context, the Binance Buying Power Ratio suggests that demand for BTC may be weakening, potentially setting the stage for a deeper price correction.
Binance Buying Power Ratio Raises Alarm
According to a post on CryptoQuant Quicktake by contributor Crazzyblockk, the Binance Buying Power Ratio serves as a reliable indicator of the overall health of the market. The analyst explains that the current index indicates a potential recession for Bitcoin.
To explain, this ratio measures the flow of stablecoin money into versus the flow of Bitcoin money out on Binance, essentially showing the amount of new capital available to buy BTC compared to the amount of capital flowing out of the exchange. An increasing ratio reflects strong buying power and liquidity, while a significant decrease signals weaker demand and greater adjustment risk.
Recently, this ratio has dropped sharply, presenting what analysts call a "textbook warning" just before the latest BTC price drop. This correction has caused Bitcoin to fall from a high of $124,474 on August 13 to a low of $114,786 earlier today.
The analyst notes that this ratio peaked at 2.01 on August 14, indicating that buying pressure peaked with more than $2 of stablecoin entering the market for every $1 of BTC transferred into cold storage.
In the following days – from August 16 to 17 – this ratio experienced a strong reversal, dropping to -0.81 within 48 hours. As a result, the buying power leaving Binance exceeded the buying power entering, confirming that the primary fuel source for the BTC market has been depleted.
Subsequently, BTC experienced a continuous price correction, declining 4.7% over the past seven days. Currently, this cryptocurrency is slightly fluctuating below $115,000, while the next major support level is around $110,000. Crazzyblockk concludes:
This analysis proves that Binance is the focal point of the market. The capital flow of this exchange acts as an early warning system. A decrease in the Buying Power Ratio (BPS) signals dwindling liquidity and high adjustment risk. For any serious analyst, monitoring Binance is not optional – it is essential.
How Will Bitcoin Perform in September?
If Bitcoin avoids sliding below $110,000, the short-term holding cost model shows its next major resistance level around $127,000. A strong breakout above this level could push BTC up to $140,000.
In a separate post on X, cryptocurrency analyst KillaXBT stated that BTC must hold above $115,787 to aim for a target of $125,000 - $127,000 in September. However, this analyst warns that even if Bitcoin begins the month with a new all-time high, it does not guarantee sustainable upward momentum. At the time of writing, BTC is trading at $114,988, down 2.4% in the last 24 hours.
