The digital token that fuels the Binance Smart Chain, denoted BNB, experienced a significant slump on Monday, plunging to its lowest point since July 2022, with a value of less than $210. Market watchers are attributing the slide to a possible push by Binance CEO, Changpeng Zhao, towards a significant string of loan liquidations on the Venus protocol, a platform running on the BNB chain.
In the past, Binance and its native token have grappled with vulnerabilities, with approximately two million BNB tokens illicitly created in an exploit last October. To put this in perspective, the attacker utilized these fabricated tokens to leverage a loan of $150 million from Venus. The saga saw Venus modify its protocol procedures to state that future liquidations of such loans would see the culprit tokens transferred back to Binance for ‘burning,’ a process of effectively removing them from circulation.
One crypto analyst, MartyParty, noted a substantial liquidation around the $210 point, and currently, around 300K of liquidated BNB tokens are allegedly secured in the Venus protocol. These await the results of a governance vote, green-lighting their release back to Binance, where they will meet their fiery end.
BNB’s pricing future appears shaky at best. In fact, the same analyst predicts that the next significant Venus liquidation level could be approximately $190. Such a prediction seems plausible given BNB’s recent performance, as the past few tempestuous trading days saw the cryptocurrency slip below its 21 and 50-Day Moving Averages.
In the wake of controversies concerning the US Securities and Exchange Commission’s classification of BNB as a security and the ongoing legal proceedings against Binance, the coin is poised to retest mid-$180, a low point reached in 2022.
Experts advise crypto enthusiasts to consider diversifying amidst the current volatility. One tantalizing high-risk, high-reward strategy is engaging in crypto presales, a venture in which investors back budding crypto projects by purchasing their tokens at an initial stage. While seemingly an erratic asset class, early investors have been known to reap substantial gains. Identifying innovative projects with strong teams is critical, and the presale venture could offer desirable returns on investment.
It’s crucial to note the vital role of due diligence: crypto investments are considered risk-laden, and while this piece provides a market snapshot, it doesn’t substitute personalized financial counsel. It’s paramount to understand that investors could face hefty capital losses.
Source: Cryptonews
