Key Takeaways:
- CZ added a billion in BUSD to the industry recovery initiative.
- FTX demise left the crypto market compromised.
- BNB token could face a downturn despite bullish factors.
YEREVAN (CoinChpater.com) – Binance, the largest crypto exchange by trading volume, has added a $1 billion to the industry recovery initiative within the Secure Asset Fund for Users (SAFU).
Industry recovery initiative and SAFU
SAFU is an emergency insurance fund that Binance established in 2018 to protect users’ funds. It mainly consists of the US dollar, Bitcoin (BTC), Binance USD (BUSD) stablecoin, and Binance’s native utility token, BNB.
Other Binance-backed companies, including Aptos Labs and Jump Crypto, threw their weight behind the initiative by pledging $50 million collectively. Binance CEO Changpeng Zhao, aka CZ, noted that they would deploy the funds to buy distressed crypto assets affected by the FTX collapse.
Background: The FTX exchange and its sister company Alameda Research collapsed on Nov 8, taking down several affiliated companies. The wave resulted in a price slash across the digital asset sector and a contagion, which experts believe is far from over.
In detail, CZ and the infamous FTX chief Sam Bankman-Fried had a strained relationship, which prompted a debate on Binance’s involvement in the initial collapse. However, the responses to the industry recovery initiative rebalancing were mainly positive, portraying CZ as a “crypto hero.”
Despite the “reason to be bullish on BNB,” the token’s technical indicators pointed to a short-term bearish scenario.
BNB price falls below the support
Binance token did not immediately respond to the news, which is not uncommon. Instead, the BNB/USD exchange rate mimicked the general direction of Bitcoin’s fluctuations but with a higher amplitude, which is typical for large altcoins.
BNB jumped over 20% on Nov 22-24 but lost momentum, falling below crucial support on Nov 25.
Also read: Coinlist users unable to withdraw funds – FTX contagion at play?
As a result, the token traded at $296 in the European session on Nov 25. If the digital asset further declines, it could hit the support at $254, which was instrumental in preventing breakdowns since late July, a 15% drop from the current value.
Moreover, the trading volumes on the BNB/USD chart have been dropping since the FTX crash. In detail, the declining trading volumes could indicate disinterest among traders. Given the unstable market conditions and growing distrust in centralized exchanges, the short-term bearish scenario seems likely.
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