BNB Price

Binance-CFTC FUD puts BNB price at risk of dropping toward $200

Recent BNB price trends show that the token is declining in the short term after regulatory crackdowns. However, this time, the correction may last longer.

BNB (BNB) looks set to wipe out its March gains entirely as investors turn their attention to the latest regulatory crackdown on Binance, the world’s leading crypto exchange by volume.

BNB price logs worst daily performance in over a month

On March 27, the United States Commodity Futures Trading Commission sued Binance and its CEO, Changpeng “CZ” Zhao, alleging that the company illegally offered crypto derivatives services to Americans and facilitated illicit financial activity.

BNB dropped by over 5.5% to $305 on the announcement day, logging its worst daily performance since Feb. 13, when its price dropped by over 5.8% due to another regulatory crackdown involving Binance-branded stablecoin Binance USD (BUSD).

*BNBUSD daily price chart. Source: TradingView*

BNB’s price stabilized on March 28, wobbling between gains and losses as CZ refuted CFTC’s allegations. However, the BNB/USD pair risked falling further if one considers its recent response to regulatory actions.

For instance, the New York regulator’s BUSD crackdown in February 2023 preceded a 15%-plus BNB price decline.

*BNB price reaction to regulatory crackdowns since 2022. Source: TradingView*

Similarly, BNB plunged by up to 10.75% after the Dutch Central Bank slapped a $3.4-million fine on Binance in July 2022 for offering unlicensed crypto services. It also dropped 25% in February 2022 after Binance halted its operations in Israel, fearing a crackdown.

Rising wedge breakdown underway

The Binance-CFTC FUD has triggered a bearish reversal setup previously covered in February.

This setup involves a rising wedge pattern whose breakdown could lead to a 25% price correction toward $250 by the end of March. The March banking crisis and its positive impact on top-ranking crypto assets may have delayed the bearish call.

*BNB/USD daily price chart featuring rising wedge breakdown setup. Source: TradingView*

Simultaneously, BNB is eyeing an extended price decline toward $200 due to the formation of another rising wedge pattern on the daily chart, as shown below.

Therefore, BNB’s price could drop by as much as 30% by April when measured from current price levels.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

3 reasons why Binance’s BNB token risks sliding further by March

A slew of technical, fundamental and on-chain indicators hint at more pain for BNB’s price in February.

On Feb. 13, BNB (BNB) recorded its worst daily performance since November 2022, falling 8.5% to below $285. BNB’s price has since recovered to over $298, but its possibility of facing another sell-off remains high. Let’s take a look at a few reasons why.

BNB price rising wedge breakdown

The ongoing decline in BNB’s price came as a part of a broader rising wedge breakdown.

Notably, on Feb. 9, BNB broke out of its rising wedge pattern, a bearish reversal setup that forms as the price trends upward inside a range defined by two ascending, converging trendlines.

As a rule of technical analysis, a rising wedge’s profit target is measured after subtracting the maximum distance between the pattern’s upper and lower trendline from the breakdown point.

Therefore, BNB’s rising wedge target comes to be near $250, down about 15% from current prices. Interestingly, the $250 level also served as support in May, September and November 2022.

SEC crackdown on Binance USD

The sell-off pressure in the BNB market escalated primarily due to the United States Securities and Exchange Commission’s (SEC) crackdown on crypto company Paxos.

The regulator has accused Paxos of issuing and listing Binance USD (BUSD) — a Binance-branded stablecoin — which it deems an unregistered security. Paxos has categorically denied the allegation, noting that it would go to court if necessary.

But markets have become fearful after this news. For instance, the number of addresses holding between 1,000 and 10 million BUSD dropped dramatically since Feb. 13, dumping over $207 million in stablecoins, according to data from Santiment.

*The number of addresses holding 1,000 to 10 million BUSD. Source: Santiment*

“This is an astounding level of stablecoin dropping, especially while the other three stablecoins (Tether, USD Coin, Dai) have been seeing big holder accumulations,” noted Santiment, adding that the ramifications of the SEC lawsuit have been pushing BNB price lower.

“It also is seeing a month-high in trading volume as its price has dropped, meaning there is a higher probability of the plummet potentially continuing.“

FUD event? Fishes, whales, sharks dump BNB

From an on-chain perspective, BNB holding sentiment has weakened across all address cohorts, which include both small (fishes) and large investors (whales and sharks).

Notably, the number of addresses holding 0.001 to 10 million BNB dropped significantly in January 2023 and has been unable to recover since. This increases the token’s possibility of continuing its downtrend in February.

*The number of addresses holding 1,000 to 10 million BNB. Source: Santiment*

On a brighter note, the number of addresses holding 10,000–100,000 BNB tokens has recovered modestly, indicating some whales have been buying the dip.

Santiment concedes that the ongoing downtrend may not extend in the longer run, saying the SEC crackdown may be “a short-term FUD event.“

“Yes, it’s possible that this is one of those instances where people panic and everything returns to normal for Binance by Friday [Feb. 17].“

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

3 reasons why BNB price risks another 30% decline by January

BNB has entered the breakdown stage of its prevailing ascending triangle pattern alongside some negative fundamentals that can push price further down.

BNB (BNB), the native token of the Binance crypto exchange, is under threat of undergoing a significant price correction in the coming weeks, based on a mix of technical and fundamental indicators.

BNB triangle breakdown continues

From a technical perspective, BNB has entered the breakdown stage of its multi-month ascending triangle pattern, a trend continuation indicator. The breakdown could last until the price reaches the level that comes to be at the length equal to the triangle’s maximum height.

In other words, BNB’s ascending triangle breakdown target is near $170, down about 30% from the current price levels, as shown below. The BNB/USD pair could drop to the said level by January 2023.

*BNBUSD three-day price chart featuring ascending triangle breakdown. Source: TradingView*

For now, BNB’s breakdown move appears to be halting near $222, which has served as a strong support level in recent history, including the declines witnessed in the aftermath of the Terra (LUNA) collapse in May 2022.

BNB could retest the $222 as support, based on a rising wedge technical setup forming on the four-hour chart, as shown below.

*BNB/USD 4H price chart featuring rising wedge breakdown setup. Source: TradingView*

BNB shorts gain momentum

The bearish technical setup for BNB gets further cues from an increasing number of short positions.

Notably, the BNB’s price decline witnessed in recent days has coincided with a rise in its open interest (OI), which reached over $415 millio on Dec. 18, its highest level since November 2021. A rising OI and falling price suggest that traders have been opening new short positions in the BNB market.

*BNB/USD daily price chart versus aggregate open interest. Source: TradingView*

Wick, an options trader-cum-analyst, said BNB could be in “big trouble” if Bitcoin (BTC) falls more. The daily correlation coefficient between BNB and BTC has been mostly positive throughout their history.

“First target is $197,” he tweeted.

Binance insolvency fears drive exchange withdrawals

From a fundamental perspective, BNB looks weaker due to its parent platform Binance’s mounting legal issues. Binance could face potential criminal charges concerning money laundering and sanctions violations.

In addition, the FTX debacle also created skepticism among investors toward Binance. Many speculate that, like FTX, Binance may have used BNB as collateral for loans. While Binance has denied such rumors, its clarification has done little to help BNB snap its downtrend.

Moreover, the growing uncertainty prompted customers to withdraw $3.6 billion worth of cryptocurrencies in a week, according to data revealed by Nansen on Dec. 13. Later, the exchange halted withdrawals of USD Coin (USDC), a stablecoin backed by its rivals Circle and Coinbase, which exacerbated rumors that it might become insolvent.

*Bitcoin balance on Binance. Source: Glassnode*

On Dec. 14, Binance CEO Changpeng Zhao downplayed insolvency risks by noting that the exchange had experienced bigger withdrawals during the Terra and FTX crashes, adding that their ability to meet the withdrawal requests points toward healthy “stress tests.”

“Now deposits are coming back in,” Zhao said.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

BNB price risks 40% drop as SEC launches probe against Binance

Downside risks for BNB also come from a recent Reuter exposé that claims Binance laundered “at least $2.35 billion in illicit funds.”

Binance Coin (BNB) price dropped by nearly 7.3% on June 7 to below $275, its lowest level in three weeks.

What’s more, BNB price could drop by another 25%–40% in 2022 as its parent firm, Binance, faces allegations of breaking securities rules and laundering billions of dollars in illicit funds for criminals.

Bad news twice in a row

BNB was issued as a part of an initial coin offering (ICO) in 2017 that amassed $15 million for Binance.

The token mainly behaves as a utility asset within the Binance ecosystem, primarily enabling traders to earn discounts on their trading activities. Simultaneously, BNB also functions as a speculative financial asset, which has made it the fifth-largest cryptocurrency by market capitalization.

*BNB market capitalization was $45.42 billion as of June 7. Source: CoinMarketCap*

As a result, the U.S. Securities and Exchange Commission (SEC) is investigating whether the ICO of BNB tokens in 2017 was a sale of securities that should have been registered with the regulator, according to sources contacted by Bloomberg.

So, will all exchanges including binance delist $BNB like they did with $XRP?

— Crypto Mark ❄️ (@MarkCrypto8) June 6, 2022

This risks putting downward pressure on BNB’s price, which has already lost more than half of its value after peaking out in May 2021 at around $700.

BNB holds above May–July 2021 support

In addition to the bad news, BNB’s plunge also came as a part of a broader correction trend elsewhere in the crypto market, with top coins Bitcoin (BTC) and Ether (ETH) dipping by 7% and 7.25% on the same day.

$BNB aggressively shorted because of the FUD. pic.twitter.com/BzvGtPcK3d

— Byzantine General (@ByzGeneral) June 6, 2022

Now, BNB tests the 61.8 Fib retracement level (near $274) of the Fibonacci retracement graph sketched from its $10-swing low to $700-swing high. Interestingly, the same level was instrumental as support during the May–July 2021 session that preceded a 170% price rally.

But weak fundamentals, including the Federal Reserve’s hawkish policy, have raised BNB’s possibility of dropping below the 61.8 Fib line.

If this happens, then BNB’s next downside target could be its 200-week exponential moving average (200-week EMA; the blue wave) near $200, down about 25% from June 7’s price.

The BNB/USD pair’s weekly relative strength index (RSI), now at 34, also shows more room to drop until the reading hits 30, an oversold level that indicates buying sentiment.

*BNB/USD weekly price chart. Source: TradingView*

Meanwhile, a further drop below the 200-week EMA could have BNB eye the 0.786 Fib line near $160 as its support, down by 40% from June 7’s price.

Conversely, if BNB manages to hold strong above $274, it could rebound toward the area defined by its 0.5 Fib line around $355 and its 50-week EMA (the red wave) near $380, up over 20% from the current price level.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.