Selling Bitcoin To Save BNB?
Bitcoin

Bull and Bear stock market trend symbols. Hand drawn editable vector illustration with elements as separate objects.

The ongoing crackdown on the cryptocurrency industry by the U.S. Securities and Exchange Commission (SEC) is dealing a blow to Binance, one of the largest exchanges on the market.

The SEC recently filed a lawsuit against Binance.US, which resulted in a significant drop in the value of Binance Coin (BNB). BNB has fallen by over 23% in the last week alone and is currently trading at $238.

Binance CEO sells Bitcoin

Reports say NewsBTCBNB faces a potentially catastrophic situation due to an exploit in the Binance Bridge of the Binance Smart Chain. If the price of BNB falls to $220, the exploit could result in the liquidation of $200 million in the Venus Decentralized Autonomous Organization (DAO).

Given these developments, it has now been reported that Binance and its CEO, Changpeng Zao, are selling spot Bitcoin (BTC) to prevent BNB from falling to $220. This move was made to prevent BNB from being liquidated at this critical level, but it also limited Bitcoin’s upside potential.

The act of selling spot Bitcoin to buy BNB is known as the “liquidation waterfall” and is a tactic often used by exchanges to protect their users from large losses. As spot Bitcoin is sold, BNB is purchased, helping to defend the $220 liquidation level. However, this also puts a cap on Bitcoin’s upside potential as selling pressure on the cryptocurrency increases.

according to According to crypto trader “JW,” Binance and CZ have been selling spot Bitcoin at an alarming rate to support BNB, as seen in the chart above, causing Bitcoin’s value to fall. While this move may help prevent BNB from being liquidated, it could have a negative impact on the broader crypto market.

Binance
Binance Bitcoin Selling Heatmap. Source: JW on Twitter.

Moreover, despite positive economic news from the United States, Bitcoin is struggling to break through the newly formed resistance of $26,400 and is currently trading at $25,800. The US Consumer Price Index indicates that inflation in the country is slowing, creating a more “accommodative” economic environment.

However, growing concerns over tightening regulation and alleged selling pressure by Binance and its CEO have prevented the largest cryptocurrency from continuing its bullish trend due to selling pressure.

Bitcoin analyst predicts drop to $24,000

according to According to cryptocurrency analyst Michael Van de Poppe, Bitcoin is currently facing a key resistance level at $26,400 that it has been unable to break through. As a result, Van de Poppe expects the market to decline ahead of the Federal Open Market Committee (FOMC) meeting scheduled for tomorrow.

Van de Poppe’s analysis suggests that Bitcoin price may face downward pressure in the short term, but he also sees this as an opportunity for traders to enter the market at a lower price.

The $24,500 to $25,000 area is a key support level and a drop in Bitcoin price to this level could present an attractive buying opportunity for investors.

Binance
Bitcoin continues to trade sideways after failing to break above the $26,400 resistance on the daily chart. Source: BTCUSDT on TradingView.com

Featured image from iStock, chart from TradingView.com

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