Binance to shut down this service as BNB short positions increase

Binance to shut down this service as BNB short positions increase

  • Binance Connect seems to have outlived its usefulness, as its shutdown is imminent.
  • BNB has continued its downtrend as the negative funding rate increases.

Binance is said to be discontinuing a service aimed at bridging the gap between traditional financial institutions and cryptocurrencies. Considering the apparent lack of success with this endeavor, could the attractiveness of BNB diminish, given its current path?

Realistic or not, here’s BNB market cap in BTC’s terms

Binance connect to shutdown

Recent reports have indicated that Binance Connect is on the brink of being shut down. According to a statement from Biswap, the closure was attributed to Binance’s decision to prioritize its core operations. Although Biswap’s post indicated a shutdown date of 15 August, as of this writing, the website remained operational. 

Binance Connect was introduced in 2022 to facilitate cryptocurrency payments for merchants. The platform offered support for 50 cryptocurrencies and major payment methods like Visa and Mastercard.

Furthermore, Binance Connect was intended to serve as the exchange’s solution for NFT checkouts, allowing users to purchase non-fungible tokens using various payment methods. However, the envisioned NFT checkout feature never came to fruition.

Binance Coin continues to take a hit

As news of the impending shutdown emerged, a closer examination of the ecosystem’s native token became increasingly crucial.

An analysis of Binance Coin (BNB) revealed a less-than-encouraging trajectory over the past few months. As of this writing, BNB was trading around $234, reflecting a nearly 1% decrease. This loss represented the token’s second consecutive daily decline. 

Binance Coin/USD price trend

Source: TradingView

Additionally, the short Moving Average (yellow line) transitioned into a resistance point, approximately at the $240 price range. Failure to promptly convert this yellow line into a support level could lead to further downward movement.

Furthermore, the Relative Strength Index (RSI) underscored the token’s feeble trend. As of this writing, the RSI line dipped below 40, indicating a potential further decline.

While the ongoing downturn of BNB might not be directly attributed to the Binance Connect shutdown, it could potentially impact the token’s attractiveness and appeal to conventional financial investors.

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BNB shorts increase

According to data from Coinglass, trader sentiment toward Binance Coin’s price trajectory appeared pessimistic. As of this writing, the BNB funding rate displayed a negative value, and this negativity in funding was rising.

The funding rate’s condition suggested heightened anticipation of a price downtrend. Given the increased number of traders engaging in short positions on BNB, a considerable amount of time might be required for the price to break free from its ongoing decline and initiate a recovery toward its previous price levels.

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