Binance Coin (BNB) price fell almost 7.3% on June 7 to below $275, its lowest level in three weeks.
What’s more, the price of BNB could fall another 25%-40% in 2022, as its parent company, Binance faces accusations of breaching securities regulations and laundering billions of dollars in illicit funds for criminals.
Two bad news in a row
BNB was issued as part of an initial coin offering (ICO) in 2017 that amassed $15 million for Binance.
The token behaves mainly as a utility asset within the Binance ecosystem, mainly allowing traders to obtain discounts on their trading activities.. At the same time, BNB also works as a speculative financial asset, which has made it the fifth largest cryptocurrency by market capitalization.
As a result, The United States Securities and Exchange Commission (SEC) is investigating whether the 2017 BNB token ICO was a security sale 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
So will all exchanges including Binance delist $BNB like they did $XRP?
This risks putting downward pressure on the price of BNB, which has already lost more than half of its value after reaching a high in May 2021 around $700.
BNB remains above May-July 2021 support
Besides the bad news, BNB’s crash also came as part of a broader corrective trend elsewhere in the cryptocurrency market, with major coins Bitcoin (BTC) and Ether (ETH) falling 7% and 7.25% on the same day.
$BNB aggressively shortened because of the FUD. pic.twitter.com/BzvGtPcK3d
— Byzantine General (@ByzGeneral) June 6, 2022
$BNB aggressively short due to FUD.
Now, BNB tests the 61.8 Fib retracement level (near $274) of the Fibonacci retracement chart plotted from its $10 low to $700 high. Interestingly, the same level served as support during the session May-July 2021 which preceded a 170% price hike.
But weak fundamentals, including aggressive Fed policy, have increased the possibility of BNB falling below the 61.8 Fibonacci line.
If this occurs, BNB’s next downside target could be its 200-week EMA (200-week EMA; the blue wave) near $200, down 25% from the current price.
BNB/USD’s weekly Relative Strength Index (RSI), now at 34, also shows more room to fall until the reading hits 30, an oversold level indicating buying sentiment.
Meanwhile, a further drop below the 200-week EMA could see BNB eye the 0.786 Fibonacci line near $160 as support, down 40% from the current price.
On the contrary, If BNB manages to hold strong above $274, it could bounce back towards the area defined by its 0.5 Fib line around $355 and its 50-week EMA (the red wave) near $380, more than 20% from the level of current price.
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