Binance Coin kickstarts its 35% crash liquidating BNB bridge hacker’s position on Venus Protocol

• Binance Coin price triggered a breakdown from its multi-year descending triangle setup.
• This move works in favor of Binance and against the BNB bridge hacker and his open position on Veenus Protocol.
• Binance co-founder Ye-Hi said that the exchange will be responsible for burning the additional BNB
• A breakdown of $221 followed by a flip of the $186 support level will add confirmation to this bearish outlook and trigger a potential 36% crash to $118.

Binance Coin price has produced a weekly candlestick  close below the key support level at $221. This development has two major ramifications. The first being that a breakdown of $221 barrier confirms the start of a downtrend for BNB. Additionally, the sudden down move has caused liquidation of BNB bridge hacker's position on the Venus Protocol. 

Also read: Binance files court order seeking protection against SEC, cites unduly burdensome requests

Venus Protocol liquidtes BNB bridge hacker's position

In October 2022, the Binance Coin chain bridge was compromised that led to the bad actor doing away with 2 million BNB tokens. The hacker then used multiple cross-chain platforms to send money to different DeFi protocols. The borrowed tokens were then used to open several trades on the Venus Protocol. After Bitcoin price crashed suddenly between August 17 and 18, some of the hacker's positions were under threat. There was a partial liqudation of the bad actor's position on August 18, lead to the liquidation of 1.104 million BNB position worth $5.5 million at the time. 

As Binance Coin price fell below $220 on August 21, the hacker's positions were liquidated once again. Currently, the hacker's wallet has nearly $258 million worth of tokens as seen on DeBank platform.

BNB Bridge Hacker

Binance co-founder He-Yi said,

The BNB collateral of Venus is covered by Binance. When the price of BNB falls, Binance will liquidate it in time. These BNB will not affect the secondary market price, and Binance will be responsible for burning these additional BNB."

Binance Coin price action puts investors in a precarious position

Binance Coin price has produced three distinctive lower highs and nearly five equal lows at $221 since February 2021. As BNB prolongs this sideways movement, it gets squeezed between two converging trend lines, signaling a squeeze in volatility.

If such development continues, Binance Coin price could trigger a steep correction to the downside. But the $221 support level is key, a weekly close below this barrier could initially result in a 14% crash to $186. A breakdown of this critical barrier would indicate an exodus for bulls and bears’ reign.

This development could trigger Binance Coin price to crash 36% to the next key support levels at $118 and 75. In total, a move to $118 from the current position would amount to a 66% loss for holders but gains for short-sellers. 

BNB/USDT 1-week chart

While the bearish outlook for Binance Coin price on the weekly chart looks logical, investors need to note that Binance has been under regulatory threat for a long time. If the exchange manages to come out of this ordeal unscathed, that would call for celebration. Additionally, if Bitcoin’s situation has also improved by then, a recovery rally would have a higher chance. 

In such a case, if BNB overcomes the $356 hurdle and flips into a support floor, it would not only also produce a higher high but also signal a breakout from the consolidative structure. 

In such a case, Binance Coin price could attempt to retest the $400 psychological level.