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BNB Price Falls 15% Post All-Time High – Standard Pullback or End of Rally?

Last Updated June 11, 2024 11:01 AM
Valdrin Tahiri
Last Updated June 11, 2024 11:01 AM

Key Takeaways

  • The BNB price decreased 15% after reaching a new all-time high of $721.8 on June 6.
  • Despite its decline, BNB has traded above a long-term resistance trend line.
  • Is the decrease a standard retest after a breakout or will it mark the end of the increase?

After an over 80-day consolidation period that started in March, the BNB price finally broke out from a symmetrical triangle on June 3. It proceeded to reach a new all-time high price three days later.

However, BNB has fallen sharply since, returning to its pre-breakout levels. The sharpness of the increase casts doubt as to whether it is simply a retest after a breakout, or if the long-term BNB upward movement has finally ended.

BNB Price Falls After All-Time High

In the first week of June, the BNB price broke out from a descending resistance trend line that existed for over 1,100 days. The trend line had been in place since the all-time high of May 2021.

After the breakout, BNB  reached a new all-time high price of $721. However, it has fallen since, almost returning to the descending resistance trend line. While this BNB price action can be considered a standard pullback after a breakout, the BNB price risks creating a bearish engulfing candlestick.

BNB Price Long-Term
BNB/USDT Weekly Chart | Credit: TradingView

Furthermore, the MACD and RSI have both generated bearish divergences in the weekly time frame. A bearish divergence in such a time frame often catalyzes a bearish trend reversal.

So, while the trend can still be considered bullish as long as the price does not close below the resistance trend line, technical indicators show weakness.

What’s Next for BNB?

The wave count implies the upward movement since June 2022 has ended. Explicitly, it suggests the price has completed wave three in a five-wave increase (white) and has started a lengthy correction.

If the prediction is accurate, BNB will decrease toward the 0.382-0.5 Fibonacci retracement support levels at $462 – $524.

Just like the weekly time frame, the 3-day RSI and MACD have generated bearish divergences, a sign associated with market tops.

Long-Term Count
BNB/USDT Weekly Chart | Credit: TradingView

The sub-wave count (black) shows an extended wave three. It also aligns with the long-term movement since reveals a breakout from a fourth wave triangle, which is the most common pattern for a wave four.

Finally, the all-time high nearly gave wave three 2.61 times the length of wave one, common in an extension. As a result, when combined with the weakness show in technical indicators, the wave count implies the BNB price has reached its top.

BNB Short-Term Count
BNB/USDT 3-Day Chart | Credit: TradingView

Despite this bearish BNB price prediction, increasing above the $729 high will mean sub-wave five has also extended. Then, the ensuing increase can take the BNB price to the next Fibonacci target at $947. At the current time, this remains unlikely.

BNB Has Likely Begun Lengthy Correction

The magnitude and sharpness of the decrease after the all-time high suggests the BNB price has reached its top and has begun a correction. This is in line with technical indicator readings and the wave count.

If this is the case, BNB will decline toward $462-524 before beginning yet another long-term upward movement.

Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
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