Binance Coin in a downward trend

Since mid-August, a downward trend has begun for BNB (Binance Coin). 

Binance Coin on a downward trend in the medium term

Leaving aside the daily fluctuations in the short-term, we see in the medium-term a sequence of descending highs that quite clearly draws a downward trend. 

In mid-August, the price of BNB was still above $325, but starting on 16 August it fell below this threshold and has not yet returned to it. 

Indeed, in the following weeks, it had a hard time getting back above $300, as it had already fallen to $280 by 20 August. 

Since then there have been three attempts to get back above $300, all of which failed, and with declining highs. 

The first was between 21 and 26 August. It lasted only five days with a peak high above $303. 

The second was between 9 and 13 September, lasting only four days, and peaking at $299. 

The third attempt was staged between 4 and 6 October, or for only two days, with a maximum peak of $296. 

Thus three failed attempts to get back above $300, ever shorter and ever lower. 

The $300 threshold at this time can be considered as a strong resistance that for now is not allowing the price of BNB to rise. On the other hand, during this period it has never dropped below $260 for too long, so it has been fluctuating in a band between $260 and $300 for almost two months now. 

This is a real period of lateralization, albeit not particularly long yet, but with declining highs. For this reason, there are analysts concerned that it may still remain within this range for a long time, so much so as to speculate that the support of $260 may even end up not holding. 

In the event that this support does give way, there is speculation that the price could return close to the annual lows of June, or around $200. 

It is worth noting that between late June and mid-August the price had risen, taking it from $200 to $330 in just under two months. These, however, remain prices well below the $500 it had at the beginning of the year. 

The curious thing is that in recent weeks a number of important events have occurred within the Binance ecosystem that could have moved the price of BNB significantly both up and down, and instead have been unable to move it out of its current swing band. 

BNB’s $100,000 hack attack

The most significant event is last week’s hack that resulted in a $100 million theft. 

Many expected the news of the hack to cause BNB’s price to drop significantly and suddenly, and instead it fluctuated very little from $290 to $280, and still remained in the current lateral range. 

This very limited impact surprised many, but it should be mentioned that it was not BNB’s blockchain that was hacked, but a secondary bridge based on BNB Chain. So the hack did not directly affect either BNB Chain or the BNB cryptocurrency, which explains why the price impact was so marginal. 

In addition, during the same period, i.e., last week, there were particularly large trading volumes on BNB Chain, which could have increased BNB’s market value instead. 

An eventful week, to say the least.

And here are the key metrics coming from #BNBChain this week ⤵️ pic.twitter.com/YKNHLYe4cw

— BNB Chain (@BNBCHAIN) October 8, 2022

Instead, this also happened only partially, with the price rising over the course of the week from around $280 to a peak of $297 on Thursday, 6 October. 

While not even these two events have been able to unlock BNB’s price swing from the range of lateralization that has been going on since late August, it means that the $300 resistance and the $260 support are decidedly strong right now. 

Moreover, it may be no coincidence that the price level touched after the collapse following the implosion of the Terra ecosystem in May was also within the current range. 

In other words, if we exclude the mid-June collapse and the small bullrun in early August, BNB’s price has been effectively lateralizing ever since it fell back below $300 due to the collapse following the Terra explosion. 

In contrast, a similar argument cannot be made for Bitcoin and Ethereum, i.e., the only two true cryptocurrencies that exceed BNB in market capitalization, because the current range of lateralization is lower than the late May prices. 

Hence, paradoxically, BNB has held up better to what happened to the crypto markets this summer after the implosion of the Terra ecosystem, while BTC and ETH have suffered more, mainly due to the failures of Celsius and 3AC. 

Indeed, compared to last year’s all-time highs, BNB is currently “only” at -60%, while BTC is at -72% and ETH at -73%.