Hidden Hands Is Selling This Altcoin On Binance! So why?

Traders in the perpetual futures market tied to the BNB token are bearish as the embattled altcoin project faces a challenging environment on multiple fronts. Here are the details…

Worried data for Binance’s altcoin

Data tracked by Coinglass shows that open interest and volume-weighted funding rates on perpetual futures have dropped to -0.18%, the lowest level since late April. This indicates that short positions (shorts) or positions that profit from the price drop are dominant and they are willing to pay long positions to keep bearish bets open. Funding rates are charged every eight hours. “The altcoin BNB is heavily shorted,” said Huff Haus, co-founder of Pear Protocol, referring to the extremely negative funding rates. Haus also added:

The recent highs have been exacerbated by discrepancies regarding BCH withdrawals from Binance.US and the ongoing Justice Department lawsuit against Binance CEO Changpeng “CZ” Zhao.

BNB, as we’ve reported as cryptokoin.com, is the token of the BNB ecosystem created by Binance, and crypto traders often associate the token with the stock market’s wealth. Faced with worldwide regulatory pressure, Binance laid off 1,000 or more of its employees in recent weeks. Earlier this month, three senior officials stepped down, citing CZ’s handling of the DOJ investigation into possible money laundering as the reason for their exit. Over the weekend, CZ called the recent layoffs FUD (fear, uncertainty and doubt) and sought to placate. “We are still recruiting,” CZ said in a tweet on Saturday.

Tension continues in the market

Still, the market remains tense, as evidenced by the extremely negative funding rates, and some observers fear more bad news is ahead. Skew, “24-hour APR -92%. Typically, this data precedes some bad news for Binance I wonder what’s coming?” said. The negative funding rate also indicates that traders are still determining whether the US court’s recent decision in favor of Ripple will help Binance in its fight against the US Securities and Exchange Commission.

Last week, the District Court for the Southern District of New York, which made a much-anticipated ruling in a lawsuit filed by the SEC against Ripple Labs for violating securities law through sales of XRP, ruled that XRP is not a security when offered to individuals through centralized exchanges and corporate He added that it would be considered a security when offered to investors. In early June, the SEC accused Binance and Coinbase of offering unregistered securities through their platforms.

Has short squeeze potential

A short squeeze is a rapid rise when bears abandon their bearish bets. For short position compression to occur, there must be higher-than-normal bearish activity in the market, as with BNB perpetual futures. In such cases, a small price increase can rush bears or short sellers to close their positions, pushing prices higher. According to Skew, breaking above $265 could close short positions. Skew said:

As long as the price trades below $265, I could see some illiquid closing rally as BNB goes above it. Otherwise, it could stay below $218, the low of the monthly range.