The BNB/USDT pair is trading 1% lower this Monday as the crypto market continues to endure negative sentiment that could stay that way based on emerging information about Terra, Voyager Digital and Celsius.
Let’s start with Kucoin, where the CEO of the world’s 4th largest cryptocurrency exchange was forced to deny rumours of the exchange being on the brink of insolvency. Rumours had emerged that Kucoin was set to freeze withdrawals amid a liquidity squeeze brought on by the collapse of hedge fund Three Arrows Capital. Johnny Lyu roundly denied the rumours in a Saturday tweet and said the company was actively hiring against the current industry trend.
The rumours emerged after Three Arrows Capital defaulted on a 15,250 Bitcoin loan it had taken from Voyager Digital. The hedge fund had also borrowed 350 million worth of USDC from Voyager and defaulted on the repayment. The default has hit Voyager Digital hard, with the company saying it would suspend all withdrawals and financial services on its platform. The company is struggling to remain solvent and had taken a $500m loan from Alameda Research, a company owned by FTX Exchange’s Sam Bankman-Fried.
Voyager’s decision to halt withdrawals mirrors that of Celsius, which has still not opened withdrawals since it suspended them on 13 June. Several other firms have done the same as a solvency crisis spreads in the industry. However, Binance, the world’s largest crypto exchange by trading volume, remains insulated with no reports of solvency issues. Instead, it is expanding its offering by launching Binance Institutional, a platform for institutional investors and high-net-worth individuals. Despite this launch, the events in the market continue to push pessimistic Binance Coin price predictions, leading to Monday’s decline.
The BNB/USDT pair is now trading at the late February 2021 lows, delineated by a support zone that encloses a series of lows seen in late February 2021. The pair needs to break the ceiling of this support zone, and the 226.0 resistance (25 March 2021, 22 June 2021 lows and 1 July 2022 high) before the recovery bounce can gain traction. This contrarian move will target the 258.4 resistance barrier, where the 24 May 2021/11 May 2022 lows are seen. Above this level, additional barriers to the recovery enter the fray at 280.0 (2/19 July 2021 lows) and at 298.2 (10 June 2022 high). 328.5 (26 July 2021 and 26 May 2022 highs) and 359.4 (3 February and 14 March lows) are also potential targets to the north that remain presently out of range.
On the other hand, if the contrarian move is seen as a rally before new short orders enter the market, the Investingcube S-R indicator’s Sell entry point comes in at 229.77. This is the previous high of the 21 June and 29 June candles. A short trade at this point would be seeking profitable completion at 201.7 (initial profit target). Finally, 196.0 comes into the picture as the additional harvest point for the trade, being the site of the floor of the support zone that encompasses the late February 2021 confluence of lows. A further drop brings in 148.0 (10 February 2021 high). This is the next target to the south if the price action extends below the TP 2 point at 196.0 (28 February 2021 low). Another price targets to the south is the 15 February 2021 low at 118.5.
This post was last modified on Jul 04, 2022, 10:34 BST 10:34