In a significant development, a leading BNB whale has decided to cash out a portion of their holdings, for a total of 10,000 BNB coins, after a long period of dormancy. The sale, valued at $2.3 million, comes amid an ongoing crackdown on cryptocurrency regulation. This in-depth disclosure was made by Lookonchain, an on-chain analyst account. Despite the sale, the whale still has 15,000 BNB coins, equivalent to around $3.5 million.
BNB Accumulation and SafeMoon Trading
Two years ago, this particular whale started collecting BNB coins, earning an impressive 110,000 BNB ($47.5 million) at the time. It accomplished this incredible feat by starting SafeMoon trading with just 10 BNB, resulting in a staggering return of 100 trillion SafeMoon tokens. Subsequently, the whale released most of these tokens, acquiring 110,000 BNB. Currently, the whale holds 25,000 BNB coins.
Sales Potential Factor
The sale of BNB tokens can be attributed to several factors, including the recent labeling by the US Securities and Exchange Commission (SEC), which considers tokens to be securities. In addition, the watchdog has filed lawsuits against Binance, Binance.US, and Changpeng ‘CZ’ Zhao, their owners, on the basis of alleged violations of securities laws. This legal action no doubt influenced the decision to cash out.
BNB Market Performance
CoinMarketCap reports a worrying trend for BNB, the fourth largest cryptocurrency by market cap. Over the past week, it has lost more than 22%, with a further decline of 1.18% in the last 24 hours. At time of writing, BNB’s trading price hovers around $229.9. The Relative Strength Index (RSI) stands at 16.39, suggesting oversold conditions below the 30 mark, highlighting BNB’s undervalued position. Moreover, the Moving Average Convergence Divergence (MACD) indicator showed a significant bearish crossover, underscoring the negative sentiment surrounding BNB.
SEC Lawsuit and Market Impact
Coinbase and Binance, the two major cryptocurrency exchanges, have faced legal action from the SEC, resulting in an outflow and a drop in the price of crypto. Binance.US, in particular, has witnessed a significant 78% drop in market depth. The market maker’s departure from the Binance.US platform, which was sparked by the lawsuit, is the main reason behind this sharp decline.
Concerns Around Binance’s Liquidity and Future
Trends such as those previously mentioned have raised concerns about liquidity and cast doubt on the future of the Binance exchange. This substantial reduction in market depth has consequences for traders who rely on strong liquidity to place trades. With reduced availability of buy and sell orders, traders may experience increased slippage and difficulty getting the desired trade execution price. Reduced liquidity also threatens the overall efficiency and attractiveness of the exchange, potentially damaging its reputation and ability to attract users.
As the crackdown on crypto regulations continues, the BNB pope’s decision to sell some of its holdings reflects the challenges faced by investors and the wider crypto market. The impact of the SEC lawsuits on Binance and Coinbase, coupled with declining market depth and liquidity issues, paints an uncertain picture for the future. Traders must carefully navigate this evolving landscape to adapt to changing market conditions and ensure successful trade execution.