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Binance Coin price has dropped sharply in the past few days.
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Binance has continued to experience significant outflows.
Binance Coin price has come under intense pressure in the past few weeks amid rising concerns about the ecosystem. BNB has plunged by more than 37% from the highest level on November 9. The current price was close to the lowest level since July.
Binance outflows continues
Binance Coin is the cryptocurrency that powers the Binance ecosystem. The BNB Smart Chain is an Ethereum rival that makes it possible for developers to build and deploy applications in all industries like decentralized finance (DeFi) and non-fungible tokens (NFT). It is also a leading player in the gaming industry.
Binance holds most of the BNB coin. However, it is worth noting that the coin is significantly different from FTX Token, which was used primarily for providing incentives to users in FTX’s ecosystem. BNB has utility in that it is widely used to run some of the biggest parts of the BNB ecosystem.
Binance Coin price has dropped because of the ongoing outflows in Binance. According to DeFi Llama, Binance has seen outflows worth over $9.25 billion in the past 30 days. Outflows rose to $1.6 billion in the past 7 days and $260 million in the past 24 hours.
These outflows are mostly because of the mountain of red flags that I wrote about here. These red flags include the fact that Binance does not have a global headquarter. Instead, the company uses a decentralized model, which is a bit risky.
Further, the company does not have a quality auditor. Its recent financial results were audited by the South African branch of Mazars. For a company the size of Binance, you would expect it to be audited by a big 4 company. During the weekend, Mazars said that it will end its crypto work. As a result, there are increased worries that the company could implode.
Binance Coin price forecast
The daily chart shows that the BNB price has been in a strong bearish trend in the past few days. In this period, it moved below the important level of $250 and then retested it today. It also moved below the 25-day and 50-day moving averages.
The coin has also formed a head and shoulders pattern, which is a bearish sign. Therefore, the Binance Coin will likely continue falling as sellers attempt to move below the important support level at $200. A move above the resistance point at $270 will invalidate the bearish view.