Binance has been subjected to increasing regulatory scrutiny in recent months. Despite the fact that the exchange’s daily trading volume has remained stable at around $30 billion, Binance Smart Chain’s native token, BNB, may soon suffer as a result.
Binance Coin Could Collapse
Binance Coin’s future appears to be doomed.
Since mid-February, BNB appears to have been developing a head-and-shoulders pattern on its daily chart. The fourth-largest cryptocurrency by market cap appears to be forming the right shoulder of a bearish formation at the moment.
A surge in selling pressure that pushes BNB below the neckline of the head-and-shoulders pattern could result in a significant drop. Slicing through the $280 support level could signal the start of a 65 percent downtrend towards $98.
This bearish target is calculated by taking the height between the pattern’s head and neckline and subtracting it from the breakout point.
Binance Coin faces only one demand barrier on its way down, which may be difficult to overcome, but a daily candlestick close below late March’s low of $211 will confirm the bearish scenario. If this happens, the Fibonacci retracement indicator indicates that the next significant area of interest is at $80. Approximately 18 points lower than the head-and-shoulders target of $98.
It’s worth noting that if Binance Coin can stay above the 78.6 percent Fibonacci retracement level at $314, an upswing towards $395 could be on the way. As the head-and-shoulders pattern is validated, such a bullish impulse could serve as a bull trap, resulting in massive liquidations across the board.
Based on this technical pattern, the only way Binance Coin can invalidate the bearish outlook is to close decisively above the right shoulder, which corresponds to the 50% Fibonacci retracement level. Taking $450 as support would indicate that the uptrend would continue towards new all-time highs.