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The market capitalization of BNB (BNB) has dropped by more than $7 billion since June 5 when the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance.
BNB price eyes technical bounce
The impact of the SEC lawsuit on Binance has been substantial so far with BNB down nearly 15% week-to-date.
On June 6, the SEC requested the Washington D.C. district court to freeze Binance’s U.S. assets worldwide. The order, if passed, will likely force the exchange to repatriate “fiat currency and crypto assets deposited, held, traded, and accrued by customers” at its U.S. platform.
Meanwhile, Binance’s United States’ entity halted trading for several pairs, including Bitcoin (BTC), Tether (USDT), and Binance USD (BUSD).
Theoretically, these events risk stirring people’s BNB buying sentiment, given it has been incorporated as a utility token in the Binance ecosystem.
However, technicals paint a potentially different picture, at least in the short term. The BNB/USD pair looks prepared for a short term bounce, given it trades around a critical support level and its daily relative strength index (RSI) has entered the “oversold” region below 30.
In this case, BNB price will likely eye its descending trendline resistance point near $280 as its next upside target in June, up around 7% from current price levels.
On the other hand, BNB’s decisive close below its multi-month ascending trendline support means that $240 should be watched as a potential downside target in June. Down around 10% from current price levels, this level appears out of the rising wedge breakdown scenario (purple).
Binance’s BNB token to $180 in 2023?
Independent market analyst TraderSZ believes BNB could drop toward the 2022 low of $180 owing to the ongoing Binance-SEC battle.
Interestingly, the ongoing breakdown of a descending triangle pattern for BNB price, suggests the same.
Related: SEC’s Gensler offered to serve as an adviser to Binance in 2019: Lawyers claim
Descending triangles are typically viewed as bearish continuation patterns in a general downtrend. They typically resolve when the price breaks below their lower trendline support with the price dropping by as much as their maximum height.
As a result, BNB risks falling toward its triangle target of around $180 in 2023, down around 30% from current price levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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