Binance, crypto’s largest centralized exchange, saw $1.2 billion in net inflows as digital asset investors capitalized on a massive market drop caused by an unwinding yen carry trade.

Bitcoin’s (BTC) rebound and a bounce in the broader cryptocurrency market spiked trading activity on CEX platforms like Binance in the last 24 hours. Binance CEO Richard Teng, citing DefiLlama data, said the crypto exchange recorded its highest single-day trading volume since the beginning of the year.

Bitcoin recovered to $55,000 and was up over 5% at press time, following a global market downturn on Aug. 5. Double-digit gains buoyed the total crypto market cap above $2 trillion again.

Market leaders Ethereum (ETH) and Solana (SOL) also retraced losses, delivering profits for “buy-the-dip” investors. Memecoins emerged with one of the largest upticks as tokens like Brett (BRETT), Pepe (PEPE), and Bonk (BONK) posted 10%+ increases.

Unwinding carry trade kneecapped crypto markets, not recession

Despite speculations of a U.S. recession, the macro-driven impulse flush stemmed from circa $20 trillion Japanese yen-carry trades, according to Goldman Sachs. In this case, a carry trade involves borrowing the yen and selling it into other currencies like the U.S. dollar, then investing that fiat into higher yield-bearing assets.

JPMorgan reportedly estimated that the unwind is only halfway done, and more market shakeouts may be inbound. 

M2 CEO Stefan Kimmel echoed analysis from both traditional finance titans. “While markets are recovering, and the worst appears to be behind, investors should be prepared for continued volatility,” Kimmel said via email. 

As crypto.news reported, Bitfinex analysts and on-chain data suggest that Bitcoin may revisit its recent lows around $48,900. A drop to these levels could trigger another market flush-out before markets resume progressive price patterns.