Key Takeaways:
- Traders jumped ship after CFTC filed a lawsuit against Binance.
- BNB price formed a bullish technical pattern.
NEW DELHI (CoinChapter.com) — Binance’s problems seem to compound after the Commodity Futures Trading Commission (CFTC) opened up a front against the exchange. According to data from the analytics platform Nansen, the exchange suffered more than $2.1 billion in net outflows on March 27.
Binance CEO Changpeng ‘CZ’ Zhao took to Twitter to assure investors of the exchange’s on-chain balance. Overall, the exchange has $63.2 billion in publicly disclosed wallets.
“Binance handles billions of both deposits and withdrawals daily. We saw a bit of net outflow yesterday, smaller than “BUSD” or “FTX” days.”
Zhao said in a tweet
A Binance spokesperson told Wall Street Journal that the exchange’s inflows and outflows had stabilized by March 29. It seems likely that the CFTC action against Binance created the FUD that caused traders to flee the exchange.
Nansen analysts affirmed WSJ that the pace of withdrawals “did pick up after the CFTC announcement.“
However, it was not the first time Binance suffered massive outflows. In Dec 2022, Binance processed $3 billion in net outflows. Furthermore, investors dissociate from Binance due to fear of exposure and another FTX-like collapse.
Market-maker firm Flowdesk the firm had reduced its funds on Binance.
Outflows Not The Only Problem For Binance
Meanwhile, Binance’s troubles did not stop with fund outflows.
The exchange suffered a two-hour outage on March 24 due to a software glitch on its main systems. Moreover, Binance halted transactions on the platform, stating it was standard procedure.
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However, a former Binance employee told Financial Times halting transactions was not standard procedure. Additionally, the exchange has started charging fees on spot Bitcoin trading. The exchange reduced trading fees to zero in 2022 to attract more investors to the platform.
Along with the CFTC action alleging that the exchange’s compliance efforts were a “sham” and that Binance helped customers skirt CFTC rules. The US government “temporarily” halted the sale of bankrupt crypto lender Voyager Digital Ltd. to Binance. The deal was worth $1.3 billion.
BNB Price Forms Bullish Pattern
BNB formed a bullish technical pattern called the ascending triangle. A horizontal line connecting swing highs and a rising trendline connecting swing lows form the pattern.
In an ideal world, buyers would enter the market as the trendlines close the gap, pushing prices above horizontal resistance with heavy volumes. But, unfortunately, the horizontal trendline rebuffed BNB’s rally, forcing the token to pull back.
The price target for a breakout is equal to the triangle’s height at its thickest point. Hence, BNB’s price might rise to $567 after confirming the pattern, a jump of over 79% from current price levels.
Price Chart
Meanwhile, BNB price spiked nearly 4.3% since March 28 to form a daily high of $319.8 on March 29. However, the Binance coin started the week on a bearish note, dropping 7.4% on March 24.
With the various bearish cues plaguing Binance, it seems likely that traders would offload their tokens due to the FUD. As a result, BNB’s price might drop to its 50-day EMA (purple wave) support near $310. A marketwide selloff could see Binance coin price drop to test support near $291 before recovering.
However, if bulls successfully defend the 50-day EMA support, BNB price might rise to target resistance near $327. A break and hold above immediate resistance could help the Binance coin price rise to $343 before downside corrections pare gains.
The relative strength index for BNB remains neutral, clocking at 50.66 on the daily chart.
