BNB price risks a 10% drop as Binance founder and ex-CEO Changpeng Zhao eyes Tuesday sentencing

• Binance founder and former CEO Changpeng Zhao will be sentenced in a US court in Seattle on Tuesday.
• Reuters had hinted at a possible three-year jail term as prosecutors cited willful violation of the law.
• BNB price has dumped nearly 3% already, reflecting a broader market bleed with potential for extended losses. 

Binance Coin (BNB) price, like most altcoins, is dumping, with the one-day chart showing a defined downtrend. While the broader market continues to bleed, things could get worse for BNB price ahead of Binance executive Changpeng Zhao (CZ) sentencing on Tuesday, April 30.

Also Read: Binance founder Changpeng Zhao could face three-year jail time

Binance exec to receive sentencing on Tuesday

Binance’s former CEO Changpeng Zhao will receive his sentence on Tuesday after capitulating to the US Department of Justice (DoJ) in November.  Binance exchange succumbed to the US DoJ, with CZ officially stepping down as CEO and inadvertently naming Richard Teng, former Global Head of Regional Markets, as the new CEO.

In the immediate aftermath of CZ stepping down, BNB price dropped by over 8% in an hour. The same could happen on Tuesday when the court issues a sentencing against the wealthiest man in crypto, according to Forbes list as of April 3.

Forbes estimates his fortune at $33 billion, followed by Brian Armstrong, the CEO of the largest US cryptocurrency exchange, Coinbase, with a net worth of $11.2 billion following the exchange’s stock price 200% surge in the past year.

As reported, the prosecution requested the court to issue a three-year jail term (36 months). Nevertheless, Federal sentencing guidelines set a maximum sentence of 18 months for the Binance founder. Zhao has previously agreed not to appeal against any sentence that stretches up to 18 months of jail time. 

The Department of Justice claimed that:

• Binance and CZ churned $1.6 billion worth of profits via illegal transactions
• Allowed users to trade despite lacking KYC compliance
• Failing to report more than 100,000 suspicious transactions involving specific terrorist groups
• Supported the sale of child sexual abuse materials and was a recipient of a large portion of ransomware proceeds.

Secretary of the Treasury Janet L. Yellen echoed the DOJ’s remarks, saying, “Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.” 

The then-acting US  Attorney Tessa M. Gorman (now confirmed) for the Western District of Washington accused Binance of enabling multiple terrorist and extremist organizations across the world. She stated:

Because Changpeng Zhao knowingly operated a financial platform without basic anti-money laundering safeguards, the company caused illegal transactions between U.S. users and users in sanctioned jurisdictions such as Iran, Cuba, Syria, and Russian-occupied regions of Ukraine – transactions for which Binance profited with significant fees.

Binance Coin outlook ahead of April 30 sentencing

BNB price is trading within a range, measured from $497.30 to $637.00, determined from where selling pressure climaxed and buying pressure peaked, respectively. Sentiment remains bullish in the Binance Coin market, but this is on the balance.

Bullish sentiment is seen with the Relative Strength Index (RSI) holding well above the mean level of 50, accentuated by the Awesome Oscillator (AO), which is still in positive territory. However, the bullish outlook is under threat, as shown by the lower highs on the RSI. If this momentum indicator records another lower high below 50, it could kickstart a selloff and confirm the continuation of the downtrend.

Notice the grey spikes on the volume profile, showing the massive bearish pressure waiting to descend on BNB price once it drops below today’s intra-day low of $581.30. The ensuing seller momentum could see Binance Coin price extend the fall below the 50% Fibonacci placeholder at $567.10.

Increased selling pressure below the aforementioned level could send BNB price to $537.10, but a failure of this buyer congestion level to hold could see Binance Coin spiral to the bottom of the market range at $497.30, constituting a 15% fall below current levels.

BNB/USDT 1-day chart

On the other hand, if BNB bulls come into play, Binance Coin price could push north. A candlestick close above $637.00 would produce a higher high, effectively invalidating the bearish thesis.