The collapse of the FTX exchange, a once “sound” crypto exchange, has sent new shivers in the sector. For a once thriving crypto exchange that was bailing out struggling firms, the collapse was least expected. The crisis has caused massive crypto downturns, and exchange-linked coins have not been spared. But just much damage did the FTX cause to cryptocurrencies like BNB?
BNB is the native token of the world’s largest cryptocurrency Binance. While Binance has often reassured users of the platform’s transparency, the token has also been getting hit. However, compared to other cryptocurrencies, BNB has been quite stable. The token was trading at $263 at press time, losing 5% in the week.
The FTX debacle calls for deeper transparency in the crypto and blockchain industry. To bring back confidence in the market, Binance CEO Changpeng Zhao introduced proof-of-reserves. The PoR will help users understand how exchanges handle their funds. CZ has since been advocating for a similar model by other crypto exchanges to increase transparency.
As it stands, crypto confidence remains low, something experts believe will stay down for a while. Bitcoin enthusiast Anthony Pompliano says the confidence game is over for crypto. In his view, the loss of investor morale will push more investors to Bitcoin. He says that is due to Bitcoin’s robust architecture and simplicity.
Aside from the views of experts, BNB may not be safe from the crypto meltdown. A confidence crisis may take longer to wither for an exchange that has been facing regulatory hurdles all over. Still, Binance has shown resilience and a global footprint that cannot be ignored. Consequently, we could have to deal with the weak sentiment as it comes while the rest unfolds for Binance and BNB.
BNB loses support at $266
From the technical outlook, BNB could proceed lower after losing key support at $266. The cryptocurrency is retesting the support-turned-resistance. The RSI is below the midpoint, indicating that there are more sellers.
Should you buy BNB?
BNB price is vulnerable after breaking below $266. The next potential support for the cryptocurrency is $242 if bulls do not defend $266.