In the past few days, the pressure to withdraw capital from the Binance exchange has decreased and the situation seems a little calmer than before. Meanwhile, a review of technical indicators and fundameal factors shows that we should probably expect a sharp correction in the price of Binance Coin in the early weeks of 2023.
According to Coin Telegraph, Binance Coin has eered the support break stage of its multi-moh ascending triangle pattern from the poi of view of technical analysis; A coinuing trend or coinuity pattern. This support break can coinue uil the price reaches a level whose length is equal to the maximum height of the triangle.
In other words, the target price of the support break of the curre ascending triangle pattern is around $170; Almost 30% lower than the curre price level of Binance Coin. As you can see in the chart below, the price of the “BNB/USD” pair may fall to the meioned level by January 2023 (D).
Currely, Binance Coin’s support breakout moveme seems to have stalled near $222. where it has historically served as a strong support level; Including the price drop caused by the collapse of the Terra network in May 2022 (May).
On the other hand, according to the formation of a bullish corner pattern on the four-hour chart of Binance Coin price, as you can see below, BN-B can also test the return of $222 as its support line.
Increase in short trading positions
From another poi of view, the Binance Coin technical review shows the increasing number of short trading positions.
The decrease in the price of Binance Coin, which we have seen in rece days, has coincided with the increase in the volume of open coracts (Open Ierest). The rate reached more than 415 million dollars on December 18 (December 27) and is the highest level of open coracts since November 2021 (Aban 1400). The increase in the value of open coracts at the same time as the price decline indicates that traders are opening new short positions in the BNB market.
Open coracts are those derivative trading positions that have not yet been settled.
Vic (ZeroHedge), an options trader and analyst, says that if the price of Bitcoin falls further, BNB will probably face a big problem. The daily correlation coefficie between Bitcoin and Binance Coin has been positive for most of their history.
He tweeted:
The first target will be $197.
Fear of the possibility of Binance bankruptcy increases withdrawals?
From a fundameal analysis perspective, Binance Coin looks weak due to the growing legal problems of its pare platform, Binance. The Binance exchange may face possible criminal charges of money laundering and sanctions violations.
In addition, the bankruptcy of the FTX exchange has caused doubts among investors about Binance. Many believe that Binance, like FTX, may have used the BNB token as collateral for a loan. While Binance has denied such rumors, the group’s financial transparency has so far done little to stop Binance Coin’s downward trend.
In addition, according to data published by Nansen on December 13, the increasing decrease in confidence has led customers to withdraw $3.6 billion of digital currency from the Binance exchange within a week. Later, Binance stopped withdrawing USDCoin; A stablecoin supported by Circle and Coinbase companies. This decision partly fueled the bankruptcy rumors of this exchange.
Also read: What will happen to Bitcoin if Binance crashes?
Chang Peng Zhao, the CEO of Binance, meioned on December 14 (December 23) that their exchange had experienced more withdrawals on its platform during the collapse of Terra (Luna) and FTX sets than now, and with this comparison, the risk of bankruptcy of the exchange He downplayed himself. He added that their ability to process customer withdrawal requests is like doing a stress test properly.
Zhao said:
Now, the deposits are being returned (to the exchange).
