Binancecoin, the cryptocurrency exchange token of cryptocurrency exchange Binance, is back in the spotlight of the crypto world, after its founder and CEO, Chanpeng Zhao pleaded guilty to charges brought against him by the US Department of Justice and agreed to step down as CEO. The cryptocurrency exchange is expected to pay a fine of $4.2 billion in the United States for a series of security violations, including AML and KYC.
- The controversy surrounding the exchange and the CZ situation itself has caused the exchange to record significant outflows of investor deposits. Reuters reported more than $950 million in reprocessed withdrawals by Binance since CZ stepped down as CEO. The negative effects of this situation have been felt by Binancecoin, which is still nearly 3000% above March 2020 panic levels despite the recent weakness.
- The darkest scenario for the crypto market now is the collapse of the largest cryptocurrency exchange, reminiscent of the story from FTX while speculation about such a scenario does not seem justified at the moment. The exchange is efficiently processing withdrawals, it seems, and the allegations themselves in the DoJ investigation were limited to regulatory and legal issues.
Binancecoin chart (H4, D1)
Looking at the 4-hour chart of BINANCECOIN, we see that the price has reacted in the area of a potential symmetrical correction, and if this scenario fills out, buyers may begin to regain the upper hand. If the Binance will be able to process withdrawals smoothly, sentiment may begin to stabilize. In December 2022, when the cryptocurrency industry was speculating about Binance's liquidity, the exchange was able to process several billion USD in withdrawals in a matter of days, reassuring investors that the funds deposited there were safe. The potential breakout range from the lower 1:1 correction is the $243 area, (38.2 Fibonacci retracement of the upward wave from October) where Binancecoin could potentially consolidate in a sideways trend. YTD, Binancecoin is one of the weakest performing cryptocurrencies, and despite Bitcoin's nearly 40% rally, the project has gained only 15% giving way to gains for the vast majority of large altcoins.
On the daily interval, BINANCECOIN halted declines at the level of the 71.6 Fibonacci retracement of the March 2020 upward wave, at the psychological support of $200 (double bottom of summer 2022 and autumn, this year). Looking at the dynamics of the averages, the SMA200 (red line) may be crucial. The price is currently located slightly below it but if demand will be able to lift the BNB price above $240 resistance zone, the downward scenario could be reversed. On the other hand, a slide below the $200 area could trigger an avalanche of defensive orders and lead to elevated volatility with a potential downside range to $135 where we saw the first consolidation after the euphoric rally from the fall of 2020.
Source: xStation5
