BNB (BNB), the native token of the Binance crypto alternate, is beneath menace of present process a big worth correction within the coming weeks, primarily based on a mixture of technical and elementary indicators.
BNB triangle breakdown continues
From a technical perspective, BNB has entered the breakdown stage of its multi-month ascending triangle sample, a pattern continuation indicator. The breakdown might final till the worth reaches the extent that involves be on the size equal to the triangle’s most top.
In different phrases, BNB’s ascending triangle breakdown goal is close to $170, down about 30% from the present worth ranges, as proven beneath. The BNB/USD pair might drop to the mentioned degree by January 2023.
For now, BNB’s breakdown transfer seems to be halting close to $222, which has served as a powerful help degree in current historical past, together with the declines witnessed within the aftermath of the Terra (LUNA) collapse in Could 2022.
BNB might retest the $222 as help, primarily based on a rising wedge technical setup forming on the four-hour chart, as proven beneath.
BNB shorts acquire momentum
The bearish technical setup for BNB will get additional cues from an growing variety of brief positions.
Notably, the BNB’s worth decline witnessed in current days has coincided with an increase in its open curiosity (OI), which reached over $415 millio on Dec. 18, its highest degree since November 2021. A rising OI and falling worth recommend that merchants have been opening new brief positions within the BNB market.
Wick, an choices trader-cum-analyst, mentioned BNB might be in “large hassle” if Bitcoin (BTC) falls extra. The each day correlation coefficient between BNB and BTC has been principally optimistic all through their historical past.
“First goal is $197,” he tweeted.
Binance insolvency fears drive alternate withdrawals
From a elementary perspective, BNB appears weaker as a result of its dad or mum platform Binance’s mounting authorized points. Binance might face potential legal prices regarding cash laundering and sanctions violations.
Associated: Binance.US set to accumulate Voyager Digital belongings for $1B
As well as, the FTX debacle additionally created skepticism amongst traders towards Binance. Many speculate that, like FTX, Binance might have used BNB as collateral for loans. Whereas Binance has denied such rumors, its clarification has carried out little to assist BNB snap its downtrend.
Furthermore, the rising uncertainty prompted clients to withdraw $3.6 billion price of cryptocurrencies in every week, in accordance with information revealed by Nansen on Dec. 13. Later, the alternate halted withdrawals of USD Coin (USDC), a stablecoin backed by its rivals Circle and Coinbase, which exacerbated rumors that it’d change into bancrupt.
On Dec. 14, Binance CEO Changpeng Zhao downplayed insolvency dangers by noting that the alternate had skilled larger withdrawals in the course of the Terra and FTX crashes, including that their potential to fulfill the withdrawal requests factors towards wholesome “stress assessments.”
“Now deposits are coming again in,” Zhao mentioned.
This text doesn’t comprise funding recommendation or suggestions. Each funding and buying and selling transfer includes threat, and readers ought to conduct their very own analysis when making a choice.
