FUD or Real: Is Binance Selling Bitcoin to Promote BNB?

Despite the recent spate of major news in the crypto sphere, one topic is being debated more hotly than any other at the moment: Is Binance selling bitcoin on the spot market to promote Binance Coin (BNB)? NewsBTC reported just yesterday that the rumors surfaced after crypto trader “JW” drew attention to eye-catching data.

However, the rumor rests on shaky feet and data. Still, there are some data points that experts are calling striking. Popular trader @52Skew said he can confirm that “it looks like BTC is being sold for USDT reserves”.

Via Twitter, the cryptocurrency trader shared the chart below, explaining that USDT reserves have been aggressively dumped into BNB since May 27. Also, BNB is supposed to be sold for BUSD to suppress BTC volatility:

To suppress downside volatility, BUSD is pumped into BTC by swapping BTC for USDT. This is technically market manipulation, Binance definitely has something here to prevent BNB as well as BTC from crashing.

Binance CEO Changpeng Zhao aka “CZ” felt compelled to respond to the allegations a few hours ago. Via Twitter, CZ called the trader’s allegations “FUD” and questioned the figure.

“4. Binance didn’t sell BTC or BNB. We still have a bag of FTT. Amazing how they can actually know who sold based on price charts involving millions of traders. FUD,” writes Zhao who also accuses the merchant of selfish motives: “Maybe they’re undercutting… who knows.”

Updated Binance FUD or Real?

However, there are growing voices regarding unusual price action on Binance. Joe Consorti, market analyst at The Bitcoin Layer, said that there is a lot of selling pressure in bitcoin on Binance that is not present on other exchanges:

More cannon fodder that they can sell spot BTC to drive up BNB. The $220 level is being strongly defended – could be the liquidation level for collateralized loans with BNB.

As NewsBTC reported, BNB is facing a potentially catastrophic situation following an exploit on Binance Smart Chain on Binance Bridge. If the price of BNB falls below $220, exploiters on the Venus Decentralized Autonomous Organization (DAO) could be liquidated for $200 million.

In light of this, “Binance commentators” suspect that the exchange wants to keep BNB above $220 at all costs in order to prevent a “liquidation waterfall”. However, CVD data has not really been able to prove this rumor to be true.

The cumulative volume delta (CVD) shows the change in cumulative volume based on the trading volume of aggressive sellers versus aggressive buyers. It allows a decision to be taken on the quantity of an asset, but not on the source of the quantity.

Hence, until further proof is presented, the rumor should be dismissed as just a rumour. Even though the CVD data shows an anomaly, it could be due to extraordinary market activity on the world’s largest crypto exchange.

At press time, BNB price is up 5.4% over the past 24-hours and is trading at $248. Meanwhile, Bitcoin is down -0.8% over the same time period.

Featured image from Markus Winkler / Unsplash, chart from TradingView.com