The BNB price continues to show signs of a weak bearish trend, dropping by 3 per cent this week and extending last week’s 5 per cent drop in value. In today’s trading session, it is already down by less than a percentage point, and intraday data is showing a high likelihood that we might continue to see a drop throughout the day.
Based on recent data, BNB appears to be facing some serious challenges in the markets, including a bearish trend that has seen its value drop by more than 40 per cent year-to-date. Investors have also raised concerns about its potential collapse due to its similarities with the now-failed FTT token, which was owned by the now-collapsed FTX crypto exchange. For context, most investors looking at BNB are comparing it with FTT tokens due to the fact that they are both owned by some of the largest crypto exchanges, and with FTT token failing, they fear that such a fate may be inevitable in future for the BNB token.
Another issue that has been raised by investors is Binance’s Secure Asset Fund for Users (SAFU) product, which is reportedly 44 per cent backed by BNB. This has raised concerns that, like the FTT token, BNB may not be able to protect users if the platform were to collapse. Despite reassurances from Binance CEO CZ that the ratio of BNB in SAFU is temporary and will be corrected, investors remain cautious about investing in BNB.
As seen from the above analysis, investors remain concerned about the prospects of BNB and its future, which has partly hindered its growth. On the technical side of things, this has been reflected by the continued drop in the price of the cryptocurrency.
Looking at the chart below, we can see the recent price action has been aggressively bearish. There is a high likelihood that the trend will continue for the next few trading sessions, which might see BNB prices dropping below the $250 price level. However, a trade above the $310 price level will invalidate my bearish analysis.
This post was last modified on Dec 08, 2022, 08:42 GMT 08:42