Crypto exchange Binance has been the subject of intense regulatory scrutiny in recent months and BNB has suffered as a result. Even as it looks like the crypto exchange is gaining a foothold again amid regulatory wolves circling, the native token is still under tremendous selling pressure. This is evidenced by the BNB’s outstanding interest, which has now shot up to new all-time highs.
BNB Open Interest hits a new all-time high
In an interesting turn of events, BNB shorts are increasing even at a time when the crypto market appears to be on a recovery trend. That reports a Twitter after by analyst Dylan LeClair, this has caused overt interest in the digital asset to rise exponentially.
The chart shared by LeClair shows that BNB’s outstanding interest is now $400 million. This is more than four times higher than the previous all-time high for the digital asset, which reached $50 million in 2020. And unlike then, the rise in outstanding interest is more bearish than bullish right now.
Hmmm, interesting stream coming in $BNB futures:
– Open interest on perpetual futures is seeing new highs as funding rates have turned deeply negative (-200% APR for next funding period) (Chart #1) – looks like someone is getting ahead of some bad news.
– The last time BNB… pic.twitter.com/1B27OkjvPx
— Dylan LeClair 🟠(@DylanLeClair_) July 17, 2023
This current surge has pushed funding rates above the negative 200% and yet traders continue to short the altcoin. The fact that traders are choosing this route despite the high cost of doing so points to the expectation of a massive crash for the digital asset.
As LeClair points out, this could mean the US Department of Justice (DoJ) is finally bringing charges against the crypto exchange. “And connoisseurs position themselves accordingly.”
Will the Altcoin Survive a DoJ Lawsuit?
As already shown by the Securities and Exchange Commission (SEC) lawsuit against the crypto exchange Binance, a lawsuit from regulators would negatively affect the price of BNB. When the SEC sued the exchange in early June, BNB’s price plummeted more than 20% in a matter of days.
 BNB price continues to hold above $240 | Source: BNBUSD on TradingView.com
Given such a response, a lawsuit from the DoJ would be even worse for its implications. And if it were to happen this week, a further 20% drop from here would see the digital asset break above $200.
At the moment, the price of BNB is still holding nicely above $240. One reason for this could be that the Arkham sale is being conducted on the Binance launch pad. Since this sale requires subscription BNB to participate, it has created temporary buying pressure for investors to participate. However, once the sale ends on July 18, this temporary plug would be eliminated and the cryptocurrency will likely fall back into $230 territory.
