Binance Comes Good on Threat and Delists Terra LUNA

Key Insights:

• On Friday, May 13, Binance delisted Terra (LUNA) and canceled all pending orders.
• Mid-week, Binance halted LUNA and TerraUSD (UST) withdrawals before warning of a LUNA delisting at sub-0.005USDT.
• Technical indicators are bearish for BNB, with BNB sitting well below the 50-day.

It has been a tumultuous week for the crypto market. The de-pegging of TerraUSD (UST) from the dollar and a slump to an all-time low of $0.0997 sent Terra (LUNA) into oblivion and forced Binance into action.

The de-pegging and a failed algorithm dragged LUNA to an all-time low of $0.001. Just last month, LUNA had struck an all-time high of $118.03 before this week’s collapse.

Exchanges quickly responded to this week’s sequence of events. On Tuesday, Binance suspended LUNA and UST withdrawals citing network congestion.

The suspension of withdrawals was said to be temporary.

Binance Delists Terra (LUNA) after Fall to sub-0.005USDT

Overnight, Binance announced the delisting of LUNA from the exchange.

According to the announcement,

“Binance will remove and cease trading, close users’ positions, conduct an automatic settlement and cancel all pending orders on the following margin trading pairs at 2022-05-13 00:40 (UTC).

Cross Margin Pairs: LUNA/BUSD, LUNA/USDT, LUNA/BTC

Isolated Margin Pairs: LUNA/BUSD, LUNA/USDT, LUNA/BTC, LUNA/ETH, LUNA/UST.”

The announcement went on to say,

“Binance will remove and cease trading on the following trading pairs at 2022-05-13 00:40 (UTC):

Spot Pairs: LUNA/BTC, LUNA/BIDR, LUNA/AUD, LUNA/BNB, LUNA/ETH, LUNA/USDT, LUNA/GBP, LUNA/BRL, LUNA/TRY, and LUNA/EUR

Binance will remove and cease trading on the following trading pairs at 2022-05-13 00:50 (UTC):

Spot Pairs: BTC/UST, LUNA/UST, ETH/UST, BNB/UST, UST/USDT.”

In addition, Binance also removed and ceased trading on BUSD-Margined Perpetual Contract: LUNA/BUSD.

On Thursday, Binance announced that it would delist LUNA in the event of a fall below 0.005USDT.

Should the price of the LUNA/USDT contracts go below 0.005 $USDT, #Binance shall proceed to delist the contracts.

Any further information including the delisting time will be announced accordingly.

— Binance (@binance) May 12, 2022

For LUNA and UST, the delistings reduce the chance of a meaningful recovery. Early losses this morning, however, support the decision to delist.

At the time of writing, LUNA was down 15.82% to $0.007462.

Things were no better for UST, down 67.91% to $0.1213. UST fell to a new all-time low of $0.0997 before finding modest support.

Despite LUNA and UST’s struggles, the broader crypto market found much-needed support this morning. A bullish session would deliver Binance Coin (BNB) just a third day in positive territory from nine sessions.

BNB Price Action

At the time of writing, BNB was up 10.36% to $295.70. A bullish start to the day saw BNB strike an early morning high of $300.17 before easing back.

The First Major Resistance Level at $299 pegged BNB back.

Technical Indicators

BNB will need to avoid the day’s $253 pivot to breakout from the First Major Resistance Level at $299. BNB would need broader crypto market support for a return to $320.

An extended rally would test the Second Major Resistance Level at $330. The Third Major Resistance Level sits at $407.

A fall through the pivot would bring the First Major Support Level at $222 into play. Barring another extended sell-off, BNB should avoid sub-$220. The Third Major Support Level sits at $178.

Looking at the EMAs and the 4-hourly candlestick chart (above), it is a bearish signal. BNB sits below the 50-day EMA, currently at $326. This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA also fell back from the 200-day EMA; BNB price negative.

A move through the 50-day EMA would support a run at $330.