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Crypto exchange Binance has been the subject of intense regulatory scrutiny over the past few months, and BNB has suffered the consequences. Even now, even as it looks like the crypto exchange is starting to find its footing once again amidst regulatory wolves, its native token is still under heavy selling pressure. This is evidenced by BNB Open Interest, which has now reached a new all-time high.
BNB Open Interest Reaches New All-time High
In an interesting turn of events, BNB shorts are on the rise even at a time when the crypto market is showing an improving trend. according to a twitter Post According to analyst Dylan LeClair, this has led to a rapid increase in open interest in the digital asset.
The chart shared by Leclair shows that BNB’s open interest now stands at $400 million. This is more than four times the previous all-time high for the digital asset, which was $50 million in 2020. And vice versa, right now the movement in Open Interest is more bearish than bullish.
Hmmm, some interesting flow $bnb Futures:
– Perpetual futures open interest seeing new highs as funding rates turn very negative (-200% APR for the next funding period) (Chart #1) – Looks like someone is outrunning the flow of bad news Is.
Last time BNB… pic.twitter.com/1B27OkjvPx
— Dylan LeClair 🟠 (@DylanLeClair_) 17 July 2023
This current surge has pushed funding rates above negative 200% and yet traders continue to short the altcoin. The fact that traders are choosing this route despite the high costs points to massive downside expectations for the digital asset.
As Leclair points out, this could mean that the United States Department of Justice (DOJ) is finally bringing charges against crypto exchanges. “And knowledgeable people are positioning accordingly.”
Will Altcoins Survive the DoJ Lawsuit?
As the Securities and Exchange Commission (SEC) lawsuit against the Binance crypto exchange has already demonstrated, the regulators’ lawsuit will have an adverse effect on the price of BNB. When the SEC sued the exchange in early June, the price of BNB fell by more than 20% in the span of a few days.
BNB price continues to hold above $240 | Source: BNBUSD on TradingView.com
Given such a response, the DoJ’s lawsuit would be even worse because of its implications. And if this were to happen this week, a further 20% drop from here would see the digital asset drop above $200.
At the moment, BNB price is still holding above $240. One reason for this could be the Arkham sale being conducted on Binance Launchpad. Since participation in this sale requires subscription to BNB, it has provided temporary buying pressure for investors to participate. However, once the sell-off ends on July 18, this temporary plug will come to an end and the cryptocurrency will likely return to the $230 area.
