Binance’s BNB token has been trending over the last 24 hours on Twitter. There are multiple reports that Binance is selling its bitcoin to boost the price of the BNB token.
BNB’s poor performance has raised concerns that a liquidation problem could be brewing. Let’s discover what is happening with the BNB token.
What is Binance doing with BNB?
The recent FUD was sparked by a tweet shared by WhaleChart claiming that Binance was selling its Bitcoin on the spot market to support the BNB. BNB is the fourth-largest cryptocurrency by market cap and powers the BNB network.
Binance is allegedly selling Bitcoin to support the price of their own token BNB
— Whale (@WhaleChart) August 22, 2023
The BNB’s value began to tank after rumors emerged that Binance was limiting withdrawals in Europe due to problems related to Single Euro Payments Area (SEPA) transfers. Although the exchange maintained that such rumors were untrue, its BNB token has continued to decline.
Different theories have emerged about what could be wrong with BNB and Binance’s possible steps to address it. Some have claimed that the exchange plans to ensure that BNB trades around the $220 mark to prevent a “liquidation waterfall”.
Binance’s clashes with regulators haven’t helped matters. The exchange is no doubt facing the most difficult phase of its existence. On one side, Binance is facing legal troubles with US regulators for selling unregistered securities and allowing US customers access to its global platform.
JUST IN: BNB has lost the strongly defended line of $212 👀😮 pic.twitter.com/c9gGLv22sA
— Bitcoin News (@BitcoinNewsCom) August 21, 2023
On the other hand, Binance has had to exit several European markets due to its inability to secure a license to operate. So, these issues have raised more fears about the looming danger for BNB and Binance as a whole.
In addition, recent figures aren’t looking too good for BNB. The issues with SEPA transfers and the SEC’s lawsuit against Binance have caused BNB’s value to lose 32% since June.
What is Twitter Saying About BNB?
Adam Cochran, who contributes to several crypto platforms, tweeted that Binance was using its Secure Asset Fund for Users (SAFU) fund to keep BNB from collapsing. In a thread on X (formerly Twitter), Cochran highlighted that Binance sells Bitcoin each time the BNB price falls.
It’s pretty clear that the SAFU fund and the now non-existent industry fund are what is being used to prop up BNB prices.
And given the frantic BTC sell off each time BNB dips, I’m guessing the real balances of even the SAFU fund are getting low.
— Adam Cochran (adamscochran.eth) (@adamscochran) August 19, 2023
Binance holds a huge amount of Bitcoin and BNB and is in a good position to manipulate the market if it wants to. Lots of crypto users are concerned about the potential effects of such rumors on market dynamics, and investor confidence has been sparked by this event.
Additionally, a recent price analysis showed that BNB has fallen below its 200-week Moving Average, which has raised more concerns about BNB’s future. The biggest fear is that the ongoing situation could result in an FTX-like situation.
Will Another Ftx Drama Rock the Market?
Crypto analysts believe that the ongoing BNB-Binance situation could trigger a repeat of the FTX FTT token collapse in November, which plunged the industry into dark times. Twitter user @SunnyDecree tweeted that BNB’s $32 billion market cap is equivalent to roughly 1.2 million BTC.
Lol claiming the BNB price is safe because of the safu fund while the recovery fund remains missing?
The fund was supposedly $1b in real stables and now consists of:
-$100m of “Binance pegged usd” (wtf is that?)
-$400m in BTC https://t.co/pcRmXVtHR5
— Adam Cochran (adamscochran.eth) (@adamscochran) August 19, 2023
Interestingly, Binance doesn’t hold 1.2 million bitcoins. This means that Binance can’t liquidate BTC beyond 1.2 million to save BNB, which could lead to another FTX-like fall.
Crypto investor Mike Alfred shared similar sentiments, tweeting that “as BNB goes, so goes Binance. And BNB looks sick. BUSD is already dead in the water.”
#Binance is following the FTX playbook to a T.
Airtoken BNB is nearing the 4th and final stage of the shitcoin life cycle in which it returns to the nothingness from which it came.
CZ will stop at nothing to extend the "life support" stage; including depletion of users funds. pic.twitter.com/d5U69s3V6t
— Mitchell 🚀 (@MitchellHODL) August 21, 2023
Alfred claimed in his tweet that “if BNB breaks under $200, it could quickly collapse as the rats flee the sinking ship. This could get ugly quickly.” He advised his followers to “pull any remaining funds while the platform is still operational.”
To simplify the #Binance issue: Binance introduced its own token #BNB. Its utility is mainly within the Binance platform. The total market cap of BNB is roughly equivalent to 1.2 million #Bitcoin. But Binance doesn't hold 1.2M Bitcoin. If BNB's value drops, Binance might… pic.twitter.com/eqjw4qb6nR
— sunnydecree (@sunnydecree) August 21, 2023
It is important to note that this is not the first time rumors have claimed that Binance is selling Bitcoin to boost Binance’s token. Binance’s CEO CZ denied these claims and labeled them as an effort to foster fear, uncertainty, and doubt (FUD).
4. Binance have not sold BTC or BNB. We even still have a bag of FTT.
It is amazing they can know exactly who sold based on just a price chart involving millions of traders. FUD. 🤷♂️ pic.twitter.com/M3MUH2bFRE
— CZ 🔶 Binance (@cz_binance) June 13, 2023
CZ reacted to previous rumors, writing, “Binance has not sold BTC or BNB. We even still have a bag of FTT. It is amazing they can know exactly who sold based on just a price chart involving millions of traders. FUD.”
Data shows that Binance’s token has traded between $215 and $350 since May 2022. This period has seen high and low ranges validated numerous times (red & green icons). In addition, the weekly RSI shows a bearish signal. This means that there’s the possibility of a decline.
Also, data suggests that there is a level of selling pressure on Bitcoin on Binance that’s not on any other platform. It is also important to note that the exploit on Binance Smart Chain’s Binance Bridge keeps this token in a potentially bad spot.
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