Bitcoin and BNB Prices Drop After SEC Sues Binance

Bitcoin and BNB Prices Drop After SEC Sues Binance

The SEC filed 13 lawsuits against crypto exchange Binance on Wednesday, June 5, 2023. The lawsuits cover unregistered operations of the exchange, intermediaries, and clearinghouses, providing misinformation regarding trading controls and oversight on the Binance.US platform, and bidding and selling unregistered unlicensed securities.

The crypto market responded negatively to this news, it can be seen that Bitcoin (BTC) has decreased by -5.3%. BNB, i.e. Binance's utility coin fell significantly by -9.2%. Within 24 hours there were US$300.22 million liquidated futures positions.

The crypto market responded negatively to this news, as seen from the valuation of the crypto market which fell -4.9% or lost US$54.3 billion from US$1.096 trillion to US$1.042 trillion when the news broke.

Bitcoin again touched the US $ 25 thousand area after experiencing a -5.3% decrease from US $ 26,816 to US $ 25,391. BNB as a crypto asset linked to Binance decreased -9.2% from US$300.1 to US$274.3.

As of June 6, 2023 at 11.30 WIB, the market has experienced a decrease in volatility with BTC trading at US$25,731 and BNB trading at US$276.2. Most likely traders and investors are monitoring the development of this case before deciding their next steps.

When compared to the case that occurred with FTX, the volatility that occurred in this Binance lawsuit was not as bad as FTX. When the FTX case exploded in the crypto market, the price of BTC decreased by -17% from US$20,500 to US$17,000 in just a matter of hours, and FTX's utility token, FTT, experienced a drastic decrease of -85% from US$18 to US$2.6.

Asset Outflows on Binance are Safely Monitored

After news of the lawsuit broke, based on data from Nansen it appears that Binance experienced withdrawals of US$125 million in a one-hour period. However, at the same time, there were assets coming in of US$56 million so that the net flow of assets was -US$69 million. The withdrawal process was monitored smoothly because Binance did not close access to withdrawals after the news.

In addition, Cryptoquant CEO Ki Young Ju showed data that there was no significant asset outflow to Binance after the news. The data shows that in a one-hour period there was an outflow of four thousand BTC which is still within normal limits.

IDR 4.45 Trillion Liquidated Futures Positions

The impact of this news has an impact on traders with futures positions. Reporting from Coinglass data, there were liquidated futures positions of US$300.22 million or around IDR4.45 trillion in the last 24 hours.

There was 91.8% of liquidated LONG positions amounting to US$275.61 million while SHORT positions amounted to 8.2% or US$24.61 million. The dominance of liquidated LONG positions shows that the majority of traders and investors expect a bullish crypto market and do not expect that there will be an SEC case with Binance resulting in losses on their positions.

The trading positions that contributed the most to liquidation were BTC of US$112.22 million, followed by ETH of US$37.3 million, and BNB of US$6.71 million.

From the fear and greed index, it can be seen that trader and investor sentiment towards the crypto market has entered the fear zone, even though the previous day it was still in the neutral zone. For a case that is just about to start, sentiment has shown fear because it involves the world's largest crypto exchange. If it is true that Binance is found guilty, it will have a huge negative impact on the crypto market.