Changpeng Zhao Where will the price of BNB go after Binance exit?

The price of Binance Coin (BNB) dropped 10% from $267 to $240 according to the exit of Binance Founder Changpeng Zhao. Base market analysis provides critical insights into possible BNB price action in the coming days.

Binance founder Changpeng Zhao has confirmed his resignation as CEO of the world's largest crypto exchange. When the successor was announced, investors trading Binance's native BNB coins made a series of initial bearish moves in response to CZ's ouster.

Changpeng Zhao has confirmed his departure as the CEO of Binance

On Tuesday, November 21, the US Department of Justice reported that Binance CEO Chanpeng Zhao (CZ) has agreed to resign. Hours later, CZ confirmed in a Twitter post that he would “take over” his role as CEO of the world's leading crypto exchange.

The shocking announcement was part of a $4.3 billion settlement with the US Securities and Exchange Commission (SEC), in which Binance admitted it was used to “transfer money to Hamas.”

Meanwhile, Richard Teng, who was appointed to oversee Binance's regional markets outside of the US in June, is said to be CZ's successor.

It is a great honor and deeply humbled to step into the new role of CEO of Binns. We operate the world's largest cryptocurrency exchange by voice. The trust placed in us by our 150m users and thousands of employees is a responsibility I take very seriously,” said Teng.

Teng's experience in core regulation and compliance stands out. He was the chief regulator of the Singapore Exchange (SGX) before heading the Financial Services Regulatory Authority of Abu Dhabi Global Market (ADGM). He spent 13 years with the Monetary Authority of Singapore (MAS).

More than 3 million dollars were traded in one hour

Binance has been the subject of several regulatory tussles in 2023. The latest tussle has sparked a bullish reaction among crypto investors trading BNB.

Within an hour of the report, $3 million was liquidated on BNB long positions, crypto derivatives market data tracker Konglas reported.

The Total Liquidations chart tracks the number of transactions closed, exited, or canceled over a period of time. As seen above, a significant increase in long-term liquidity during a major news event is a bearish signal. It is an indication that investors are anticipating a prolonged negative decline.

The chart also shows that this is the highest liquidity of Blush BNB contracts in 90 days. This puts the price of BNB at risk of a long squeeze.

A long squeeze is a market phenomenon that occurs when traders who hold long positions (bets on the price of an asset) experience significant losses and are forced to sell their positions to limit their losses.

This selling pressure, in turn, could lead to a quick and prolonged decline in the price of BNB over the next few days.

As for pain relief, the amount of funding from investors will decrease

Further confirming the bullish stance, BNB's funding volume entered a sharp decline in the hours following Changpeng Zhao's exit announcement.

The chart below shows that the BNB funding rate has dropped from a daily high of 0.025% to 0.0093% at press time.

Fixed funding rates represent the difference between a fixed futures market price and an index (spot) price. Generally, when funding rates start to decline, it means that BULL traders are paying SHORT traders less to keep their positions open.

A sharp drop in BNB funding rates means many investors expect further declines in prices and market liquidity in the coming days.

BNB is currently trading at $240 at press time. But if the funding rate slips to negative values, the bears can effectively control the market and force the price of BNB down to the $200 mark.

On the flip side, a quick succession plan eliminates initial market FUD and boosts investor confidence in the days ahead. In this case, bullish traders entering to buy the dip may unknowingly trigger a rapid BNB price reversal.