Despite the recent flood of major news in the crypto sector, there is one topic that is being debated more than any other at the moment: Is Binance selling Bitcoin on the spot market to support the Binance Coin (BNB)? NewsBTC reported yesterday that the rumor arose after crypto trader “JW” drew attention to striking data.
The rumor, however, stands on shaky legs and data. Still, there are some data points that experts call striking. Popular trader @52Skew stated that he can confirm that “it looks like BTC is being sold for USDT reserves”.
Via Twitter, the crypto trader shared the chart below and explained that USDT reserves have been aggressively pumped into BNB since May 27. In addition, BNB is supposedly being sold to BUSD to quell BTC’s volatility:
BUSD is pumped into BTC to quell downside volatility so that BTC can be exchanged for USDT. This is technically market manipulation, Binance is definitely up to something here to prevent both BNB and BTC from crashing.
Binance CEO Changpeng Zhao aka “CZ” felt compelled to respond to the allegations a few hours ago. Via Twitter, CZ called the trader’s allegations “FUD” and interrogated the data.
“4. Binance has not sold BTC or BNB. We even have a bag of FTT. It’s amazing that they can know exactly who sold based on just a price chart involving millions of traders. FUD,” writes Zhao, who also accuses the trader of selfish intentions: “Maybe they are shorting… who knows.”
Renewed Binance FUD or Real?
However, the voices about unusual price action on Binance are on the rise. Joe Consorti, market analyst at The Bitcoin Layer, argues that there is a lot of selling pressure on Bitcoin on Binance that is not present on other exchanges:
More cannon fodder they might sell spot BTC to support BNB. The $220 level is vigorously defended – could be a liquidation level for a BNB-backed loan.
As reported by NewsBTC, BNB is facing a potentially disastrous situation following an exploit on Binance Smart Chain’s Binance Bridge. The exploiter can be liquidated for $200 million on Venus Decentralized Autonomous Organization (DAO) if the price of BNB falls below $220.
In light of this, “Binance critics” suspect that the exchange wants to keep BNB above $220 at all costs to avoid a “liquidation waterfall”. However, the CVD data cannot really prove this rumor to be true.
The cumulative volume delta (CVD) shows the cumulative volume changes based on the trading volume of aggressive sellers versus aggressive buyers. This allows a judgment to be made about the volume of an asset, but not the source of the volume.
Therefore, until further evidence is provided, the rumor must be dismissed as a rumor. Even if the CVD data shows an anomaly, it could be due to exceptional market activity on the world’s largest crypto exchange.
At the time of writing, the BNB price is up 5.4% in the last 24 hours and is trading at USD 248. Meanwhile, Bitcoin is slightly down -0.8% over the same period.
Featured image by Markus Winkler / Unsplash, chart from TradingView.com