According to data tracked by Coinglass, the number of active futures contracts linked to Binance's BNB token continues to increase.
Binance's BNB Token Futures Hits 5-Month High
The increase in open interest is accompanied by the decrease in prices and indicates an increase in bearish short positions in the market.
Total futures position rose to 1.57 million BNB ($360 million) today, reaching the highest level since January 1st. This figure has increased by over 8% in the last 24 hours and by about 27% in a week.
The market price of BNB dropped to $221 earlier today, almost leveling off with the low recorded on December 12.
Prices have dropped more than 25% since the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance on June 5.
Negative funding rates in the perpetual futures market also indicate a downward trend. Funding rates represent the cost of holding a bullish or bearish position in the market.
Dubai-based crypto analyst and investor Reetika Malik said, “BNB has been in a lot of futures trading right now.
Because Venus Protocol has an on-chain liquidation of around $220, which could lead to a cascade.” Venus Protocol is an algorithm-based money market system on the BNB Chain.
The Venus protocol, perhaps in an attempt to calm the nerves in the market, recently tweeted that if the cryptocurrency reaches the liquidation threshold, the BNBChain core team will take over the BNB position on Venus and ensure that the cryptocurrency is not released.
*Not investment advice.