Binance Coin has been on edge following the collapse of FTX.
Binance holds most of the BNB coin in circulation.
There are too many red flags.
Binance Coin price has wavered in the past few days as concerns about the parent company continued. BNB was trading at $274, where it has been in the past few days. This price is substantially lower than the November 6th high of near $400.
Binance red flags emerge
The biggest story in finance has been the arrest of Sam Bankman-Fried in the Bahamas. His arrest came a few weeks after his empire made up of Alameda Research and FTX collapsed. At its peak, FTX handled billions of dollars on a daily basis. It was valued at more than $32 billion.
SBF’s arrest, as we wrote here, has led to questions about other crypto exchanges like Binance, Huobi, and Crypto.com. These companies have all committed to boost their transparency by providing audited proof of reserves.
Binance also published audited documents that showed that its Bitcoin holding was 1:1 to customer deposits. The audit was conducted by a South Africa’s branch of Mazars, the company that used to audit Trump. In addition, the published and publicized document left the liabilities side of the balance.
Still, there are several red flags about Binance and BNB. For one, a closer look at on-chain metrics shows that Binance is the biggest holder of BNB. An entity listed as Binance 7 holds 52% of all BNB’s valued at over $2.3 billion. Another entity holds a stake worth over $2 billion while Binance 3 holds coin worth over $8 million. All this concentration is a major red flag.
Another red flag about Binance is the accounting firm that the company uses. Binance is a multi-billion dollar company that has an important role in the crypto industry. Therefore, analysts believe that it should be audited by a big-four companies like KPMG, Deloitte, EY, or PwC.
Further, following the collapse of FTX and scrutiny on regulators, there is a likelihood that prosecutors will turn on Binance next. On Monday, it was reported that US authorities were looking to arrest the company’s CEO in a long-running investigation. Most importantly, there is a lot that we don’t know about Binance
Binance Coin price prediction
BNB/USD chart by TradingView
As we saw with the FTX token, the collapse of a parent company has an impact on the respective token. Of course, BNB has more utility than FTT since it powers the BNB Smart Chain industry. However, most BNB holders have bought it because of its association with Binance.
The daily chart shows that it has formed what looks like a head and shoulders pattern and moved below all moving averages. Therefore, because of lingering headline risks, I believe that the BNB price will have a bearish breakout soon. If this happens, it could move below $200.
How to buy Binance Coin
eToro
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
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Binance
Binance is one of the largest cryptocurrency exchanges in the world. It is better suited to more experienced investors and it offers a large number of cryptocurrencies to choose from, at over 600.
Binance is also known for having low trading fees and a multiple of trading options that its users can benefit from, such as; peer-to-peer trading, margin trading and spot trading.
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The post Binance Coin Price Prediction: A Mountain of Red Flags appeared first on CoinJournal.
