Binance and Bybit pause withdrawals as Bitcoin tumbles over 13%
Top crypto exchanges Binance and Bybit temporarily paused withdrawals amid a sharp market sell-off that sent Bitcoin down more than 13% to below $64,000 — its lowest since October 2024. Binance reported technical difficulties affecting withdrawals, resolved within about 20 minutes, and later said withdrawals had been restored. Social media campaigns encouraged users to withdraw funds, prompting concerns about exchange safety, but on-chain data showed Binance’s exchange balances rose as deposits exceeded withdrawals. Binance co-founder He Yi called the withdrawal push a coordinated community stress test and urged careful use of self-custody (Binance Wallet, Trust Wallet, hardware wallets). Co-founder Changpeng Zhao denied claims Binance dumped $1 billion in BTC, calling such allegations “imaginative FUD,” and highlighted the exchange’s large reserves (reported ~ $155.6 billion in exchange-held assets as of Jan 2026). The episode underscores how leverage and rapid sentiment shifts can trigger forced selling and briefly test exchange infrastructure, raising short-term market volatility and renewed scrutiny of centralized exchange liquidity and operational resilience.
Bearish
Temporary withdrawal pauses during a steep Bitcoin sell-off increase short-term market uncertainty and heighten liquidity concerns for centralized exchanges. Such events force margin liquidations and can accelerate downward moves as leveraged positions are unwound — a dynamic visible here with Bitcoin down >13%. Although Binance restored services quickly and on-chain data showed net inflows (suggesting no systemic outflow), social-media-driven withdrawal waves can still trigger panic, higher volatility, and temporary declines in risk appetite. Historical parallels include the 2021–2022 episodes when exchange outages and contagion concerns amplified sell-offs and contributed to rapid price drops (e.g., FTX-era runs and earlier exchange outages). For traders, the immediate implication is elevated short-term downside risk, unreliable exchange order execution during stress, and potential liquidity gaps for large orders. Over the long term, swift resolution and transparent reserve reporting can restore confidence; persistent operational hiccups or evidence of reserve shortfalls would be structurally negative. Risk-managed strategies (reduced leverage, using limit orders, diversifying custody) are prudent until volatility and on-chain flows normalize.