On Tuesday last week, the BNB token started an aggressive bullish move that saw its price surge by more than 25 per cent. At one point, the BNB price recovery was looking poised to return to the pre-FTX crypto exchange crash that triggered BNBs 35 per cent drop from November’s price.
However, the bullish trend started to reverse during yesterday’s trading session when BNB fell by a percentage point. Today, the bearish trend has become more aggressive, resulting in a 4 per cent drop in value at press time.
Despite showing signs of recovery, BNB price has continued to suffer in the markets, following the collapse of a similar token¸the FTT token, which set the stage for the eventual collapse of the FTX crypto exchange. For many investors, the BNB token has a lot of similarities with the now-failed FTT token to ignore, including being an asset of a leading crypto exchange.
Questions about BNB having a similar fate as the FTT are also being asked, with the most recent concern coming from a Twitter user, Willy Woo, who raised concerns that Binance’s SAFU product was 44 per cent backed by their own token, BNB.
As seen from the FTT token collapse, an insurance product backed by the platform’s own platform would be wiped be the first one to be wiped out and hence would not be able to protect its users. In response, CZ, the Binance CEO, indicated the ratios were temporary, and the rate of BNB in SAFU would be corrected with time.
The questions asked about BNB were an indication that despite all efforts being made to dissociate the token from other failed projects, investors were still cautious about it, and it is highly likely that they are staying away from investing in BNB due to fear.
As seen from the above fundamental analysis, there is still fear of investing in tokens that mirror the now failed FTT token. This has hindered the growth of the BNB token for the past few weeks. However, based on the recent price action, it is likely that we might see the crypto recovering and resuming the bullish trend that started last week.
Therefore, I expect the current bearish trend to reverse in the next few trading sessions and the BNB price to push past the $332 resistance level. It is highly likely that we might see BNB returning to pre-FTT collapse price levels of trading above the $350 price level for the long term. However, a trade below $280 price level will invalidate my bullish analysis.
This post was last modified on %s = human-readable time difference 12:47