Binance vs. SEC: How low can BNB price go?

June 8, 2023 Coin Telegraph

BNB is clinging on to its short-term bullish bias amid the Binance-SEC fiasco but a 30% price decline is still on the cards.

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.

*BNB daily market capitalization. Source: TradingView*

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.

*BNB/USD daily price chart. Source: TradingView*

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.

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.

*BNBUSD weekly price chart. Source: TradingView*

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.

Tether Grows 2.3% as Stablecoin Economy Loses $2.4 Billion in Value Since March 31

April 25, 2023 Bitcoin.com

Tether Stablecoin Sees 22% Growth in 2023 Despite Dollar-Pegged Token Economy’s Contraction

April 17, 2023 Bitcoin.com

With Close to 10 Billion Stablecoins Redeemed, BUSD’s Supply Drops to Lowest Level Since April 2021

April 16, 2023 Bitcoin.com

Tether supply hits $80B for the first time since May 2022 — stablecoin rivals stumble

April 6, 2023 Coin Telegraph

Tether supply hits B for the first time since May 2022 — stablecoin rivals stumble

Binance USD

Tether supply across cryptocurrency exchanges has dropped 28% in 2023, however, hinting at an overall decline in demand for stablecoins.

Tether (USDT) continues to benefit from the ongoing turmoil in the U.S. dollar-backed stablecoin industry with its market capitalization growing significantly in Q1 2023 at other stablecoins' expense.

Tether market cap reaches $80 billion

On April 6, the circulating market cap of USDT surpassed $80 billion for the first time since May 2022 with a gain of $15 billion so far in 2023.

*USDT circulating market cap 12-month performance. Source: Messari*

On the other hand, the market caps of its chief rivals, namely USD Coin (USDC) and Binance USD (BUSD), fell by about $12 billion and $9.4 billion, respectively.

*USDC and BUSD circulating market cap year-to-date performance. Source: Messari*

Tether benefits from non-U.S. status

Crypto traders opted for Tether given the growing concerns around USD Coin and Binance USD.

Notably, USDC market capitalization slipped due to its $3.3 billion exposure to the now-collapsed Silicon Valley and Silvergate banks. While BUSD suffered after New York regulators ordered Paxos to shut down the stablecon's issuance.

USDC weathered the crisis after the Federal Deposit Insurance Corporation's assurance that they would make depositors at the insolvent banks whole. As a result, the stablecoin recovered its dollar peg after losing it at the peak of the banking crisis in mid March.

*USDC price performance YTD. Source: Messari*

But a growing crypto crackdown in the U.S. has prompted investors to maintain distance from regional firms. For instance, Paxos confirmed that the Securities and Exchange Commission (SEC) treats BUSD as an unregistered security.

On the other hand, Tether is a non-U.S. firm and has repeatedly assured that it has no exposure to insolvent U.S. banks. Nonetheless, it keeps facing constant scrutiny over its reserve assets and lack of proper audits for years, despite such issues becoming less of a concern among traders.

USDT supply drops across exchanges

Interestingly, the growth in the USDT circulating supply has coincided with a drop in its supply across exchanges.

Tether's balance on exchanges has dropped 28% YTD to 12.88 billion USDT, according to Glassnode. In comparison, the aggregated stablecoin balance across exchanges has dropped by 41% YTD to $22.31 billion.

*USDT vs. rival stablecoin balances across crypto exchanges. Source: Glassnode*

The decline in stablecoin reserves coincides with a crypto market rally, suggesting that traders have been converting their crypto dollars to buy Bitcoin (BTC) and Ether (ETH).

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.

Hacker Offered Bounty After Exploiting $573,000 in Crypto From DeFi Platform

April 4, 2023 The Daily Hodl

Here’s What Could Signal the Next Bitcoin Leg up Amid ‘Massive’ BTC Transactions, According to Crypto Analytics Firm

April 2, 2023 The Daily Hodl

Binance-CFTC FUD puts BNB price at risk of drop toward $200

March 28, 2023 Coin Telegraph

Binance-CFTC FUD puts BNB price at risk of drop toward 0

Binance Coin

Recent BNB price trends show that the token declines in the short term after regulatory crackdowns. However, this time the correction may last longer.

BNB (BNB) looks set to wipe out its March gains entirely as investors turn their attention to the latest regulatory crackdown on Binance, the world's leading crypto exchange by volume.

BNB price logs worst daily performance in over a month

On March 27, the U.S. Commodity Futures Trading Commission sued Binance and its chief executive Changpeng Zhao (CZ), alleging that the company illegally offered crypto derivatives services to Americans and facilitated illicit financial activity.

BNB dropped by over 5.5% to $305 on the announcement day, logging its worst daily performance since Feb. 13, when its price dropped by over 5.8% due to another regulatory crackdown involving Binance-branded stablecoin, BUSD.

BNB's price stabilized on March 28, wobbling between gains and losses as CZ refuted CFTC's allegations. However, the BNB/USD pair risked falling further if one considers its recent response to regulatory actions.

For instance, the New York regulator's BUSD crackdown in February 2023 preceded a 15%-plus BNB price decline.

*BNB price reaction to regulatory crackdowns since 2022. Source: TradingView*

Similarly, BNB plunged by up to 10.75% after the Dutch Central Bank slapped a $3.4 million fine on Binance in July 2022 for offering unlicensed crypto services. It also dropped 25% in February 2022 after Binance halted its operations in Israel, fearing a crackdown.

Rising wedge breakdown underway

The Binance-CFTC FUD has triggered a bearish reversal setup previously covered in February.

This setup involves a rising wedge pattern whose breakdown could lead to a 25% price correction toward $250 by the end of March. The March banking crisis and its positive impact on top-ranking crypto assets may have delayed the bearish call.

*BNB/USD daily price chart featuring rising wedge breakdown setup. Source: TradingView*

Simultaneously, BNB eyes an extended price decline toward $200 due to the formation of another rising wedge pattern on the daily chart, as shown below.

Therefore, BNB price could drop by as much as 30% by April when measured 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.