Binance Token Teeters on Edge, 4th Critical Support Test Sends Shockwaves!
👇 1) Binance’s BNB is one of the essential tokens in the crypto ecosystem as it powers the Binance Smart Chain (BSC) and is the backbone of the exchange’s ecosystem. Despite the decline, the BNB market cap remains a respectable $36bn.
👇 2) For the fourth time, the BNB is testing the critical $220/200 level and IF this level breaks, there could be severe consequences on sentiment.
👇 3) When there are more sellers than buyers for perp futures, the funding rate trades negatively, and after the SEC’s accusations, the BNB perp futures bottomed at a -88% negative funding rate as many traders expected lower prices.
👇 4) The market has become hopeful that a deal between the SEC and Binance.US regarding the freezing asset request by the regulator can still be worked out, and this has caused the funding rate to normalize slightly to -38% but still indicates downside pressure for BNB.
👇 5) While BNB tokens have rallied after Binance published its response to the SEC, more negative news could still be hitting the tapes as the US Department of Justice could file accusations soon.
👇 6) This could cause BNB to break its psychologically important $200 level, which provided chart technical support in the post-Terra/Luna collateral liquidation period in July 2022.
👇 7) Total Value Locked (TVL) on BSC has dropped to $3.45bn, its lowest level since March 2021, and signals that deployed capital is being removed from the BSC projects. As a result, fees generated on BSC have dropped -50% from a year ago to just $800k per day and are currently down -30% from the Q2 2023 daily average.
👇 8) Last year, a hacker took advantage of a vulnerability of the security proofs within the BNB bridge and was able to mint 2m BNB tokens, valued at $540m.
👇 9) The BNB chain team halted the blockchain to prevent the hacker from moving the funds. But the hacker was able to leverage the Venus Protocol and borrowed $150m worth of stablecoins with 900k BNB ($210m valued), which has a liquidation level of $220 for the BNB. If prices reach the $220 level, we could see $150m worth of auto liquidations.
👇 10) Venus (XVS) is the largest DeFi money market on BSC. In November 2022 a proposal was passed for the BNB chain core team to take over the position once the liquidation threshold is reached. Hence, this $220 will be protected and might not impact material prices even if the loan is liquidated.
Most of Binance’s 8,000 employees are also paid in BNB, and the BNB decline is equivalent to a salary cut…
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