Binance Stocks Surge as Exchange Debunks Short Position Concerns
1min read Binance has released a statement addressing concerns about large short positions (LSP) before the GPS notice, asserting that there was no anomalous trading activity. The cryptocurrency exchange conducted a thorough investigation in response to community feedback regarding the occurrence of large sell orders prior to the GPS announcement. The investigation revealed that the observed trading behavior was within normal market fluctuation ranges and did not indicate any abnormal trading activities.
The investigation found that the market's active sell volume in the 10 minutes before the announcement increased from $5.4 million to $9.6 million, a growth of 1.78 times. However, this increase was deemed to be within the normal fluctuation range when considering historical data. The active buy or sell volume for GPS typically represents 40% to 60% of the overall trading volume, and there was no abnormal change in this ratio before and after the announcement.
The statement also clarified that active "sell" behavior can involve both opening short positions and closing long positions. Therefore, the increase in sell trading volume reported by the community was not solely due to traders opening short positions as part of "pre-positioning" but also included users with existing positions closing long positions. This further supports the conclusion that there was no preemptive front-running behavior to position short or long orders.
Additionally, the total number of open contracts did not show any significant change in the 5 minutes before the announcement compared to the 5 minutes after the announcement. This further indicates that there was no abnormal trading activity or front-running behavior. Binance's statement aims to reassure the community that the trading environment on their platform remains fair and transparent, with no evidence of manipulative trading practices.
