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BNB coin has become heavily shorted in the perpetual futures market.
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It has also formed a bearish flag pattern on the daily chart.
Binance Coin has faced intense selling pressure in recent weeks as short positions in the futures market have increased. BNB was trading around $244 on Monday, down from last week’s high of $261 and more than 31% below its peak earlier this year.
BNB loses momentum
While many cryptocurrencies rallied after the conclusion of the Ripple vs. SEC case, BNB remained range-bound and ultimately lost much of its gains. The token climbed to $261.40 but then retreated sharply.
A central reason for BNB’s weakness is the ongoing legal action brought by the U.S. Securities and Exchange Commission (SEC). The SEC has accused Binance of multiple violations, including operating broker-dealer functionality in the United States without complying with applicable regulations.
It remains uncertain how the lawsuit will unfold or how long the case will take to resolve. Legal observers have indicated the SEC may have a substantial case, which contributes to investor caution.
BNB’s price has also been weighed down by reports that Binance recently laid off more than 1,000 employees. Like other crypto firms, Binance endured major challenges during the crypto winter and has had to restructure operations.
Despite these headwinds, there are signs the company’s financial position may be improving as the market recovers. Binance has seen sizable inflows in recent weeks; DeFi Llama data shows more than $2.9 billion in inflows over the past 30 days, bringing its reported assets to over $64 billion.
At the same time, futures market data indicate many traders are positioned short on BNB. CoinGlass open interest figures show a strong bias toward short-sellers. Analysts note that sentiment has deteriorated further due to high-profile staff departures, reported inconsistencies around BCH withdrawals on Binance.US, and an ongoing Department of Justice matter involving Binance’s CEO, Changpeng “CZ” Zhao.
BNB price outlook
The daily chart shows BNB in a clear downtrend over the past several months. Recently the token appears to have formed a bearish flag pattern, which in technical analysis commonly signals continuation to the downside.
BNB has slipped below its 25-day and 50-day moving averages, reinforcing the bearish picture. Given the descending flag structure, a downside breakout is a distinct possibility in the near term. If BNB breaks lower, the next significant support level to monitor is around $220.
How to buy Binance Coin
If you are considering purchasing Binance Coin, review reputable exchanges and marketplaces, compare fees and security features, and ensure you follow local regulations. Always use secure wallets and consider spreading funds across custodial and non-custodial options to manage risk. Conduct your own research and consider your risk tolerance before investing in cryptocurrencies.