Binance CEO Changpeng Zhao predicts challenging period after rumors of FTX-like collapse
- Binance exchange is consistently making headlines for massive user withdrawals and fear of an FTX-style collapse.
- Changpeng Zhao shrugged off user concerns and said the platform can survive any crypto winter and will get past this challenging period.
- BNB, the native token of the exchange, yielded 12% losses for holders over the last two weeks as they struggled with FUD on crypto Twitter.
Binance, the world’s largest exchange by trade volume, is the target of speculation on crypto Twitter as users raise concerns over similarities with doomed crypto broker FTX. CEO Changpeng Zhao tried to assuage employee concerns in a recent memo. The exchange’s native token BNB is bleeding in response to the fear, uncertainty and doubt (FUD).
Binance in the spotlight after Changpeng Zhao’s memo to employees
Binance International witnessed a total of $12.4 billion in cryptocurrency withdrawals over the past week according to crypto intelligence tracker Nansen data. This is higher than the weekly withdrawals of eleven cryptocurrency exchanges combined.
Token flow value by exchange sourced from Nansen
The top crypto exchange’s withdrawals have raised concerns among traders and investors on crypto Twitter. Following the collapse of FTX exchange, CZ’s exchange published a proof-of-reserves report created by leading accountancy firm Mazars. However, instead of alleviating user concerns it raised several questions about the largest exchange by volume’s solvency, how collateralized the platform is, and what internal accounting controls and processes it has in place to safeguard user’s deposits.
Changpeng Zhao, the CEO of Binance addressed staff concerns in a recent memo circulated among the exchange’s employees. CZ wrote that the exchange expects the next several months to be bumpy but that the business will get past this challenging period.
The co-founder of the world’s largest exchange commented on FTX exchange’s collapse and said,
With all that is going on, we know that we are at a historic moment in crypto. Rest assured, this organization was built to last.
Is Binance the next FTX?
FTX exchange collapsed relatively quickly in early November after an outflow of a few billion in withdrawals. Samuel Bankman-Fried’s exchange then froze withdrawals and filed for bankruptcy shortly after. Massive exchange outflow is now seen as a red flag among platform users.
CZ shrugged off the issues, however, and assured traders that the exchange can survive any crypto winter and was built to last.
BNB is bleeding in response to speculation
Binance’s native token BNB yielded 12% losses over the last two weeks as speculation regarding the platform’s insolvency started doing the rounds. BNB is used to pay transaction fees and distribute rewards among users. BNB price nosedived from $301.33 to $264.81 within fourteen days.
BNB/USD price chart
BNB price is currently in a descending channel. BNB price trend changed in week four of November, then in the first week of December, the 200-day Exponential Moving Average (EMA) crossed over the 50-day EMA resulting in a bearish death cross signal. If BNB extends its losses, the 61.8% Fibonacci extension at $244.4 is the downside target.
The Relative Strength Index (RSI), a momentum indicator, reads 33.99 at $265.71. RSI is close to 30. If it breaks below it will indicate that BNB is oversold.