BNB Price Could Face A Sharp Drop In The Near Term, Here’s Why?
The price of BNB (BNB) has broken below both the long-term and short-term patterns. This could potentially lead to a significant drop in the near future.
Breaking the Ascending Triangle Pattern
The price of BNB (BNB) has been trading within an ascending triangle pattern since May 2022. This is a bullish pattern that often results in a breakout in most cases. However, the BNB price has twice made false breakouts above the triangle since then (green ellipses). This may have trapped aggressive bulls who entered positions on the breakouts.
Indeed, the price of BNB finally broke below the triangle during the week of June 5th to 12th with a large bearish candle and confirmed the triangle’s support line as resistance twice since (red arrows). This is seen as a retest in a downtrend.
A downside move equal to the height of the pattern, measured from the breakdown point, would target a decline in the BNB price to around $108, which corresponds to a decrease of over 50% from the current level.
The weekly RSI indicator supports the possibility of further decline as it is below 50 and sloping downward.
Ascending parallel channel
The daily chart aligns with the bearish view from the weekly timeframe. Yesterday, the price of BNB broke below an ascending parallel channel that has been forming since reaching a low of $220 on June 12th. This confirms the continuation of the downtrend.
The daily RSI signal is similar to the weekly RSI, supporting the idea of further decline.
If the downtrend continues, the first significant support area to watch is around $190. There is minor support at $220, but the bears might break below this level since the ascending parallel channel has been in existence for 65 days. This is a sufficiently long period to prompt a strong move.
The most likely outlook indicates that the price of BNB will continue to decline in the near future. The nearest target is found at $190, and potentially lower towards the target of the triangle at $108.
This view is likely to be invalidated if the price of BNB reclaims the support line of the long-term ascending triangle at $270. However, this seems challenging at the current moment.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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