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Binance, the world’s largest cryptocurrency exchange, is once again facing selling pressure on its service altcoin Binance Coin (BNB). The funding rate in perpetual futures contracts tied to the major altcoin has reached its most negative level in about three months.
Warning Signs for BNB
Investors in BNB perpetual futures market are shorting the altcoin, expecting its price to drop due to various challenges it is currently facing.
Data from crypto data platform Coinglass shows that the open interest and volume-weighted funding rate in perpetual futures have dropped to the lowest level since the end of April, reaching -0.18%. The funding rate, updated every eight hours, indicates that shorts or sellers dominate the market, with investors taking positions mainly expecting a price decline to profit from the drop.
Huff Haus, co-founder of Pear Protocol, referred to the highly negative funding rates, stating that “BNB is being heavily shorted.” Haus added, “The recent high number of layoffs, inconsistencies in BCH withdrawals at Binance.US, and the ongoing investigation by the US Department of Justice into Binance CEO Changpeng Zhao (CZ) have worsened investor sentiment and a lawsuit seems imminent.”
As of the time of writing, BNB is trading at $243.85, down 2.23% in the last 24 hours.
More Layoffs Following Resignation of Senior Binance Executives
Binance, facing regulatory pressures worldwide, made headlines last week when it laid off 1,000 or more employees and announced further layoffs. Prior to this, three senior executives of the cryptocurrency exchange resigned, citing concerns about CZ’s handling of the DOJ’s investigation into possible money laundering.
CZ, in his statement regarding the layoffs, claimed that the media was spreading FUD (Fear, Uncertainty, and Doubt) and stated that the reported number was incorrect. According to the Binance CEO, the layoffs were part of regular business operations, and Binance continues to hire new employees to expand its workforce.
