The collapse of the cryptocurrency exchange FTX and what happened in the process caused serious doubts in the crypto community. In fact, Binance, which was the subject of allegations that it took part in the FTX collapse, started to get its share from it. Binance has been receiving criticism from the community lately for its proof of reserve and full asset transparency. In the midst of these developments, huge short positions were created in Binance Coin (BNB). This caused the altcoin price to melt.
Massive BNB sale amid FUD, where is the altcoin price headed?
The color of the cryptocurrency market has turned red again after a short period of green. However, some projects have a darker hue. One of them is Binance Coin (BNB), the native token of the largest crypto exchange Binance. After the recent drop in altcoin price, there is a growing sense of shorting in the community. According to recent reports, the audit firm, which has received harsh criticism, has cut Mazars’ ties with the crypto exchange. According to experts, the news on this topic likely had a long-lasting impact on the altcoin price.
Meanwhile, cryptocoin.comAs you can follow, the general mood in the crypto market continues its downward trend after the Federal Reserve signals that it will continue to increase interest rates in 2023. In this context, Binance BNB shorting activity seems to have picked up in recent days.
Binance’s audit partner, Mazars Group, has previously faced backlash from the crypto community over the exchange’s asset transparency. That’s why the said audit firm has suspended ties with Binance. The trader community believes that Binance is not completely transparent about the way it holds and stores user assets. Hence, this insecurity led to a sharp drop in the altcoin price. After all, all the criticism about the crypto exchange’s assets started after Binance released its proof of reserve audit report.
BNB facing ‘short squeeze’?
Meanwhile, BNB traders are opening large shorts amid the FUD (fear, uncertainty, doubt) around asset transparency. Caesar, a crypto enthusiast, said that short positions in the BNB token have reached around $118,000,000. In a post, Caesar stated that traders are piled in with all this FUD surrounding Binance. This comes amid the steady decline in altcoin price lately.
According to CoinMarketCap data, BNB is trading at $236.10, down 3.45% in the last 24 hours. However, the altcoin has lost around 18% in the past week. Accordingly, BNB is the second worst among the top 10 cryptos in terms of weekly performance.
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