$BNB is burdened with deeply negative funding rates as crypto traders take bearish bets on the token. This was noted in the perpetual futures market tied to the token.
“$BNB is being heavily shorted,” observed Huff Haus, co-founder of Pear Protocol. As per data by Coinglass, open interest and volume-weighted funding rates in perpetual futures have slipped to -0.18%. This came out to be the lowest since late April.
The shorts, which are positions that profit from a price drop, stood dominant. Traders were also willing to pay longs to keep their bearish bets open.
$BNB is the token of the BNB ecosystem which is created by the largest cryptocurrency exchange, Binance. Recently, the exchange has been confronted with challenging situations on multiple fronts. From the recent exits of top executives to the inconsistencies related to $BCH withdrawals from Binance.US, the complications are many.
On top of this, its CEO Changpeng ‘CZ’ Zhao also faces scrutiny by the U.S. Department of Justice. The pending case is looking into whether Binance allowed Russian customers to access the exchange in violation of U.S. sanctions related to Russia’s invasion of Ukraine.
The exchange has been under the close watch of regulatory authorities all around the world too. In early June, the U.S. Securities and Exchange Commission (SEC) charged Binance and Coinbase for offering unregistered securities over their platforms. Looking at the recent negative funding rate, one can say that the traders are still making up their mind on whether the recent U.S. court’s ruling favouring Ripple would help Binance in its fight against the SEC.
Last week, CEO CZ came forward in reassuring Binance users amidst multiple FUD and mounting pressure from regulators. He claimed that this external pressure is only strengthening the company’s team.
The week also saw $BNB losing its spot to $XRP in market capitalisation. As of writing, $BNB has a market cap of $37.93billion, approximately $2bn behind $XRP’s market cap.