BNB Price Forecast: BNB Gives Up 11% – Weak Foundation or Hype?

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Over the recent days, BNB’s value recorded a significant drop. It slipped under $225 and $220, transitioning into a bearish phase like Bitcoin and Ethereum.

It fell briefly below the support at $212, testing the $202 critical price region on August 22. This level marks the lowest point BNB has fallen to since July 2022.

Notably, the BNB coin has recorded a loss of over 8% and 12% in the last 7 and 14 days. However, in the previous 24 hours, the asset has been recovering, recording an increase of more than 2%.

This increase is accompanied by a 37% rise in its trading volume of $708 million, indicating that many are buying this token. As of 8:30 AM EST, BNB Coin is trading at $214 based on CoinGecko information.

What Constituted Weekend Drop?

The cryptocurrency market is presently experiencing a macroeconomic decline. The combination of Evergrande’s bankruptcy and SpaceX’s sale of $373 million in Bitcoin holdings has caused Bitcoin’s value to decrease from nearly $30k to slightly above $26k.

BREAKING: Elon Musk’s SpaceX sold all its $373 million #bitcoin – WSJ

— Bitcoin Magazine (@BitcoinMagazine) August 17, 2023

This massive selloff increased the ‘FUD’ level in the market, leading retail trading to enter a selling frenzy. This downturn has negatively impacted BNB and several other coins. In the past week alone, the price of BNB has fallen by 12%.

Speculation about Major Loan Liquidations on BNB Chain, Coin Burning Increases Uncertainty

There’s speculation that Binance CEO Changpeng Zhao might influence significant loan liquidations on the Venus protocol. Last October, an exploit created 2 million illegal BNB tokens, allowing the exploiter to borrow $150 million from the Venus protocol.

Venus later updated its protocol documentation, stating that when these loans are liquidated, the BNB coins will be given to Binance, who will burn them.

A recent tweet by crypto analyst MartyParty suggests that a significant liquidation at $210.80 occurred as predicted.

The Venus $BNB situation (updated LIVE)

Is CZ trying to liquidate the Venus loan to burn the 900k illegal $BNB?

Based on the Venus protocol documentation, the loan would have to be liquidated to burn the illegal $BNB. That is the only way to remove it from the ecosystem.… pic.twitter.com/xNQEQIG5Uy

— MartyParty (@martypartymusic) August 21, 2023

According to the analyst, around 300,000 liquidated BNBs are currently held within the Venus protocol, waiting for a governance vote to decide whether to release them to Binance.

Binance has already committed to burning these tokens once they are received. Depending on how the situation unfolds, it might introduce uncertainties and influence trading dynamics for the BNB coin.

However, BNB’s fear and greed index value is 60% (NEUTRAL), relatively lower than yesterday.

BNB Price Analysis

Since June 12, the token has been ranging between the $238 and $262 price levels before its drop on August 14 due to the negative market sentiment. The daily chart shows that BNB/USDT is recovering, as evident in the two daily green candles, suggesting a potential bullish momentum.

However, if the BNB/USDT pair could maintain this momentum and close today’s trading session in the green, more traders might consider entering the market.

The Bollinger Band indicator also shows that buying activities increase as the market exceeds the indicator’s lower band (oversold region).

This could signal a prospective price rebound or correction. Meanwhile, if the buyers could sustain the momentum and close above the lower band today, the indicator might serve as a strong support level, hindering the market from going down.

On the other hand, with more bearish momentum, the market might break below the Bollinger Bands indicator. However, the Relative Strength Index below the oversold region supports the potential bullish reversal analysis.

The asset’s MACD below the signal line indicates the bearish sentiment present in the market, but the fading red histogram bar shows that the seller’s momentum is weakening.

Still, traders should assess additional indicators and market context before making trading decisions.

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