Can BNB replace Bitcoin?

June 07, 2024

Reading time: 5 minutes

BNB's bull run stumbles as funding rate soars: What's next for investors?

Key points:

  • BNB's recent price surge and all-time high attracted new traders and boosted social sentiment.

  • Analysts predict BNB could reach $900, but a short-term pullback is possible.

News - BNB's price exploded last week, reaching an all-time high and igniting a surge of bullish sentiment. This attracted new traders and sent open interest skyrocketing to its highest level in months.

The token's social volume mirrored the price increase, reflecting a surge in excitement and discussion.

Further bolstering confidence, the weighted sentiment metric spiked on 5 June. Thus, indicating a dominant presence of bullish voices in the market.

Analysts’ take - A popular crypto analyst, by the name of World Of Charts, even tweeted a prediction of a potential 49% increase for BNB, pushing the price toward $900 in the coming months.

However, despite the optimistic outlook, the past 24 hours have seen a shift in the tide. The coin's price dipped over 1%. This minor pullback coincided with a rise in the funding rate. Additionally, the "extreme greed" reading on the Fear and Greed Index suggested the market might be due for a correction.

It’s important to remember that BNB's future trajectory hinges on its ability to overcome the short-term bearish signals. If the bearish forces take charge, the price could potentially fall back to $687, where significant liquidation pressure might emerge.

Saudi Arabia joins project mBridge for CBDC cross-border experiment

Key points:

  • The project mBridge is meant to test the feasibility of CBDCs for faster international payments.

  • The project has reached a minimum viable product (MVP) stage and is seeking private sector involvement.

News - The Bank for International Settlements (BIS), based in Switzerland, announced on Wednesday that Saudi Arabia has become a full participant in Project mBridge.

This project is a cross-border experiment that explores the potential of central bank digital currencies (CBDCs) for international trade settlements and other payments.

More details about mBridge - Launched in 2021, Project mBridge is a collaborative effort between the BIS Innovation Hub and the central banks of China, Hong Kong, Thailand, and the United Arab Emirates (UAE).

It aims to test the viability of CBDCs in facilitating instantaneous cross-border transactions using a dedicated blockchain platform called the mBridge Ledger.

Another significant development announced by the BIS is that Project mBridge has reached its minimum viable product (MVP) stage after three years of development.

The project is now inviting participation from private sector financial institutions to "propose new solutions and use cases" that can further develop the platform and unlock its full potential.

What’s more? Project mBridge boasts a wide range of participants beyond its six full members. A total of 27 observer institutions, including influential organizations like the IMF and the World Bank, are closely following the project's progress.

Former US Prosecutors urge State Department for release of Binance executive detained in Nigeria

Key points:

  • Former US prosecutors demand release of Tigran Gambaryan, head of Binance's financial crimes, held in Nigeria.

  • The letter criticizes lack of action and warns of dire consequences.

News - Over 100 former US federal prosecutors and agents wrote a letter to Secretary of State Antony Blinken on 6 June. The letter requested the US Department of State to secure the release of Tigran Gambaryan, the head of financial crimes and compliance at Binance, from custody in Nigeria.

The officials recognized Tigran Gambaryan's ten years of dedicated service as a special agent with the Internal Revenue Service (IRS).

Their letter said that the US government hasn't done enough about Gambaryan's situation, and further inaction could have serious consequences.

Deep dive into the letter - The cohort asserted that Gambaryan is being held on "false charges" related to money laundering and tax evasion. Basically, they emphasized that his position at Binance should not hold him responsible for the company's actions.

The US officials insisted on his innocence and argued that he should not serve as a stand-in for the company due to his mid-tier role.

What’s the backstory? Gambaryan's troubles in Nigeria reportedly began in January when he, along with other Binance employees, traveled to the country for discussions with Nigerian officials on financial compliance.

After the meeting, Gambaryan faced a situation where Nigerian officials allegedly requested a "substantial payment" to address compliance issues. Concerned for their safety, the employees left the country, but Gambaryan was invited back a month later, leading to his arrest and detention in February on suspicion of money laundering and tax evasion.

Bitcoin poised for bullish breakout on Central Bank rate cuts, says BitMEX founder

Key points:

  • The Federal Reserve meeting next week is seen as a major turning point for Bitcoin's price direction.

  • Bitcoin has been trading above $70,000 for the past two days and could reach its March highs if upcoming events are favorable.

News - Arthur Hayes, founder of BitMEX, believes Bitcoin is on the verge of a significant price increase due to recent interest rate cuts by major central banks.

Hayes initially predicted a breakout in August, but has moved that date forward due to policy changes by the European Central Bank (ECB) and the Bank of Canada (BOC). He believes these cuts mark the beginning of a coordinated easing cycle by central banks, with the US Federal Reserve likely to follow suit.

Analysis of BTC’s performance - Bitcoin has held above $70,000 for the past two days and could test its March highs near $72,000 if key events this week unfold favorably. Many analysts see the Federal Reserve meeting next Wednesday (12 June) as a potential turning point for Bitcoin's price direction.

According to Quinn Thompson, founder of crypto hedge fund Lekker Capital, the market needs confidence that the Fed will cut rates in July. This confidence could be instilled by a weak jobs report on Friday, low inflation data, or dovish signals from the Fed next week.

Hayes also suggests that even if the Fed delays a rate cut, US intervention to curb the recent plunge in the Japanese Yen could lead to a similar outcome for Bitcoin by increasing the money supply.

Crypto Scams Uncovered

  • Investors fell victim to a cryptocurrency project known as "Save the Kids”, which was promoted by influencers and celebrities, claiming to be a charitable initiative aimed at helping children. However, it turned out to be a honeypot scam designed to exploit investors.

  • A cryptocurrency account registered in Wang Yicheng’s name received more than $90 million between January 2021 and November 2022. At least $9.1 million of these funds were linked to pig butchering scams. Victims of these scams, such as a 71-year-old California man, fell prey to fraudulent schemes promising high returns.

  • Pincoin and iFan were two interconnected cryptocurrency projects that operated as a Ponzi scheme in Vietnam. Investors were promised high returns through a lending program and referral bonuses. However, after collecting millions of dollars from investors, the operators disappeared, leaving behind empty offices and defrauded investors.

Top 3 coins of the day

Bitcoin Cash (BCH)

Key points:

  • BCH was one of the top few coins that noted value appreciation in the past week.

  • Technical indicators showed the coin had more room to grow.

What you should know - Bitcoin Cash has seen a recent surge, gaining over 10% in the last week. This upswing comes after a period of relative stagnation. Technically, BCH was hovering below its 50-day simple moving average (SMA), treating it as a key resistance level. However, on 4 June, a decisive break above this level manifested. Thus, strengthening the bullish momentum. Well, the next resistance stands near $600. At press time, the coin treated 100-day SMA as its near-term support. Bearish pressure could push the prices to the 200-day SMA near $366. But leading technical indicator showed the momentum was in favor of buyers. Its reading suggested that the coin will continue to register buying pressure for the next few days before it corrects.

Filecoin (FIL)

Key points:

  • Filecoin bears have dominated the market structure for most of the sessions in the long-term horizon.

  • At press time, FIL was 97.49% down from its all-time-high.

What you should know - Filecoin defied its usual pattern, surging 16% over the past week, and exchanged hands at $6.66, during press time. This comes after a failed attempt to reach $12 in March. The key resistance level of $6.67, which has held strong for two months, finally saw a breakout on 7 June. However, FIL's historical volatility and seller dominance raise questions about the sustainability of this rally. The neutral MACD indicator further underscores the market's indecisiveness. Buyers will have to push hard to maintain the $5.21 support level. Otherwise, a fall toward $5 is quite likely.

Ethereum (ETH)

Key points:

  • ETH has been trading sideways after a sudden surge on 20 May.

  • Its Open Interest declined over the last day.

What you should know - Ethereum faces a crucial juncture - After a dip below $4,000 in recent months, ETH is currently trading within the $3,000-$3,800 zone. Selling pressure has overtaken buying in the last 24-hours. If ETH loses its $3,634 support, an immediate fall to $3,033 is quite possible. On the contrary, should bulls take charge, $4,000 can be breached within a short time. At press time, however, the market was waiting for a bullish confirmation. RSI stood flat at the 62 mark, hinting at a possible consolidation. Traders shouldn’t forget that Bitcoin’s bullish trajectory will also play a vital role in shaping ETH’s near-term moves.

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