Data monitored by Coinglass reveals a continuous surge in open interest for Binance’s BNB token futures contracts. On Monday, the total open interest reached 1.70 million BNB ($378.8 million), marking the highest level since January 1. Over the past 24 hours, the open interest has spiked by more than 16%, and within a week, it has surged by almost 50%.
CoinMarketCap data shows that BNB’s current market rate dropped to $224 in the early hours of Monday, nearly reaching the low recorded on December 12. The price of BNB has experienced a decline of more than 25% since the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance on June 5.
Market Outlook
When open interest rises while prices decline, it indicates a rise in short positions or bearish bets, confirming a downward trend. Additionally, the negative funding rates observed in the perpetual futures market further support a bias toward bearish positioning. Funding rates represent the costs associated with holding bullish long or bearish short positions in the market.
Negative rates imply that bearish short positions are willing to pay bullish long positions in order to maintain their price-negative bets. According to experts, there is currently a significant amount of shorting happening on BNB due to an on-chain liquidation event at around $220 on the Venus Protocol. This situation has the potential to trigger a cascade effect.
Venus Protocol operates as an algorithm-based money market system on the BNB Chain. In an effort to reassure the market, Venus Protocol recently shared a tweet indicating that the BNBChain core team will step in and assume control of the BNB position on Venus if the cryptocurrency reaches the liquidation threshold. This intervention aims to prevent the sudden dumping of cryptocurrency into the market.
