In a dramatic turn of events, leading cryptocurrency exchanges Binance and Bybit have paused withdrawals following a steep decline in Bitcoin prices. The turmoil was sparked by a market sell-off that saw Bitcoin drop more than 13%, falling below $64,000, prompting concern among investors.
Binance was the first exchange to announce issues, citing technical difficulties that temporarily disrupted withdrawal services. This interruption lasted around 20 minutes, causing panic among traders who were quick to react. Although the outage was brief, on-chain data indicated that Binance accounts saw an uptick in deposits, suggesting some users took the opportunity to add funds rather than withdraw.
He Yi, co-founder of Binance, acknowledged that significant withdrawal surges can act as valuable pressure tests for the exchange”s systems. She emphasized the importance of using individual wallets for enhanced security, especially during turbulent market conditions. Yi cautioned users against making hasty blockchain transfers that could lead to costly mistakes.
The suspension of withdrawals triggered a wave of panic across social media, with campaigns urging clients to withdraw their funds from both Binance and Bybit. This anxiety was compounded by Bitcoin”s recent downturn, which marked its lowest price point since October 2024, reflecting a staggering 50% drop from its peak the previous year. As a result, concerns about the safety of funds on centralized platforms have intensified.
Despite the panic, Binance reported a net increase in deposits during the withdrawal halt, contradicting fears of a mass exodus. CEO Zhao dismissed allegations of market manipulation as unfounded, asserting that the movements reflected user actions rather than any orchestrated effort by the exchange.
In light of the recent market chaos, Binance has faced heightened scrutiny, with critics drawing parallels to the 2022 collapse of FTX. Nevertheless, the exchange maintains its liquidity remains robust, with reserves reportedly standing at approximately $155.64 billion as of January 2026, according to a report from CoinMarketCap. Zhao reassured users of Binance”s position as a market leader in liquidity, which serves as a buffer against adverse market trends.
The current situation highlights the vulnerabilities that centralized cryptocurrency exchanges face during periods of market volatility. While safety concerns linger, both Binance and Bybit assert their financial stability and resilience. In these uncertain times, investors are encouraged to consider self-custody options to safeguard their assets.
