BNB Token Futures Open Interest Hits 5-Month Peak
Open interest, the number of unsettled and active futures contracts tied to Binance's BNB token, continues its upward trajectory, reaching a 5-month high of 1.57 million BNB ($360 million). This surge in open interest comes despite a decline in BNB's market rate, signaling an influx of bearish short positions in the market.
BNB Price Plummets Amidst Regulatory Pressure
BNB's market rate dropped to $221 early Monday, nearly matching the low registered in December of the previous year. The price decline of over 25% since the SEC filed a lawsuit against Binance on June 5th reflects the regulatory pressures faced by the crypto giant.
Bearish Bets Confirm Downtrend
The increase in open interest alongside a price decrease suggests an influx of short positions or bearish bets, confirming a downtrend. Negative funding rates in the perpetual futures market further indicate a bias for bearish positioning.
Onchain Liquidation Triggers BNB Shorts
Dubai-based crypto analyst and trader Reetika Malik points out that the current shorting of BNB is due to an onchain liquidation around $220 on Venus Protocol, which could potentially trigger a cascade.
Venus Protocol Steps in to Prevent Market Dump
In response to the market situation, Venus Protocol tweeted that the BNBChain core team will take over the BNB position on Venus if the cryptocurrency hits the liquidation threshold, ensuring the cryptocurrency is not dumped into the market. This move is seen as an attempt to calm market nerves amidst the bearish trend.