The price of Binance Coin (BNB) fell nearly 7.3% to below $275 on June 7, its lowest level in three weeks.
Furthermore, the price of BNB could drop by 25%-40% in 2022 as its parent firm, Binance, has been accused of breaching securities regulations and laundering billions of dollars in illicit funds for criminals.
two bad news in a row
BNB was issued in 2017 as part of an initial coin offering (ICO), which earned Binance $15 million.
The token primarily behaves as a utility asset within the Binance ecosystem, primarily enabling traders to earn discounts on their trading activities. At the same time, BNB also acts as a speculative financial asset, which has made it the fifth largest cryptocurrency by market capitalization.
As a result, the US Securities and Exchange Commission (SEC) is investigating whether an 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.
This risks putting downward pressure on the price of BNB, which has already lost more than half of its value since peaking around $700 in May 2021.
BNB above May-July 2021 support
Aside from the bad news, BNB’s decline came as a part of a broader correction trend elsewhere in the crypto market, with top coins Bitcoin (BTC) and Ether (ETH) falling 7% and 7.25% on the same day.
Now, BNB has tested the 61.8 Fibonacci retracement level (around $274) of the Fibonacci retracement graph, sketched from its $10-swing low to $700-swing high. Interestingly, the same level as support was important during the May-July 2021 session, which preceded the 170% price rally.
But weak fundamentals, including tougher Federal Reserve policy, increased the chances of BNB falling below the 61.8 Fibonacci line.
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If this happens, BNB’s next downside target could be its 200-week exponential moving average (200-week EMA; blue wave), which is down around 25% from today’s price.
The weekly relative strength index (RSI) of the BNB/USD pair, now at 34, also shows that there is room for further downside until the reading reaches 30, an oversold level that indicates buying sentiment. does.
Meanwhile, a further drop below the 200-week EMA could see BNB forming support near the 0.786 Fibonacci line near $160, which is 40% below today’s price.
Conversely, if BNB manages to hold strong above $274, it may move towards the area defined by its 0.5 Fibonacci line near $355 and its 50-Week EMA (Red Wave) near $380, the current price level. may rebound by more than 20%.
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