Some Reasons For Why The BNB Price May Drop By 30% Further By January




Based on a combination of technical and fundamental signs, the native cryptocurrency of the Binance crypto exchange, BNB, faces the possibility of experiencing a substantial price fall in the upcoming weeks.

Continued Collapse Of The BNB triangle

Technically speaking, the multi-month ascending triangle pattern, a trend continuation indication for BNB, has reached the breakdown stage. The decline may continue until the price hits the point where the triangle’s maximum height and length coincide.

In other words, BNB’s ascending triangle breakdown objective is close to $170, or around 30% below the current price levels. By January 2023, the BNB/USD pair may fall to the specified level.

For the time being, BNB’s breakdown move is coming to an end at $222, which has historically functioned as a solid support level, including the losses that followed the Terra (LUNA) collapse in May 2022.

Based on a rising wedge technical setup appearing on the four-hour chart, BNB may rechallenge the $222 level as support. The rise in short holdings provides more clues for the bearish technical situation for BNB.

Notably, the BNB’s price decrease in recent days has been accompanied by an increase in open interest (OI), which on December 18 hit its highest level since November 2021 at over $415 million. The price is down, and the OI is increasing, which indicates that traders are adding new short positions to the BNB market.

BNB might be in “serious peril,” according to Wick, an options trader and analyst if Bitcoin BTC continues to decline. BNB and BTC’s daily correlation coefficient has been primarily positive throughout their existence. He tweeted, “First objective is $197.”

From a fundamental standpoint, BNB appears weaker due to the escalating legal problems facing its parent company Binance. Regarding money laundering and sanctions crimes, Binance can be charged criminally.

Additionally, investors began to have doubts about Binance as a result of the FTX fiasco. Many believe Binance may have utilised BNB as loan collateral, similar to how FTX used to use FTX. 

Despite Binance’s denial of these allegations, the company’s explanation hasn’t done anything to reverse BNB’s downward trajectory.

In addition, clients withdrew $3.6 billion worth of cryptocurrencies in a week because of the rising unpredictability, according to statistics released by Nansen on December 13. 

Later, the exchange stopped allowing withdrawals of USD Coin (USDC), a stablecoin supported by its competitors Coinbase and Circle, which fuelled speculation that it would go bankrupt.

About the author, Awais Rasheed

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