Binance Coin (BNB), the native token of the Binance ecosystem, faced significant challenges in the wake of the recent lawsuits filed by the US Securities and Exchange Commission (SEC) against cryptocurrency exchanges Binance and Coinbase.
These regulatory actions had a profound impact on the cryptocurrency market, suppressing any potential upward momentum. As a result, Bitcoin (BTC) reached its lowest point in two months, falling to $24,000 at the time of the filing.
Although BNB also endured the effects of regulatory pressure, it managed to find some stability around the support level of $220.
The question now is how Binance Coin will navigate strict US regulations and maintain its position in the cryptocurrency landscape.
Challenges for BNB's upward potential
Based on the price movement observed in the second quarter of 2023, a Fibonacci retracement tool was used to assess the potential obstacles hindering BNB's upward trend.
The first obstacle lies at the 23.6% Fibonacci level, marked at $250.8, while the second hurdle is at the 38.2% Fibonacci level, marked at $269.8. If BNB encounters resistance at these levels, it is likely to experience a retracement and potentially revisit the $220 support level.
Vulnerable to aggressive sell-off if strong support is breached
If BNB manages to surpass the mentioned resistance threshold, there is a possibility of a significant downturn in the form of an aggressive sell-off. In this scenario, it would be advisable to keep an eye on the immediate lower support levels at $200 and $184.
These levels are important as they may serve as crucial points where the BNB price could temporarily find stability or be subjected to further downward pressure.
According to CoinGecko, the current price of BNB is $243, reflecting a slight decline of 0.9% in the past 24 hours. However, it has witnessed a notable rally of 8.6% within the past seven days.
Since the SEC filed its lawsuit against Binance, the open interest rates for BNB have gradually increased. The open interest has risen from $316 million on June 5 to the current level of $385 million. The growing number of open contracts for BNB in the futures market indicates an optimistic outlook.
As Binance Coin currently faces significant hurdles at key levels, the outcome of this price analysis raises the question of whether BNB will be able to overcome these obstacles and regain its upward momentum.
Traders and investors will closely monitor the price rejection scenario, the strength of the support levels, and the buying pressure indicators to assess BNB's future performance in the cryptocurrency market.
(Note: The content of this article should not be taken as investment advice. Investing carries risks, and your capital is at risk.)
(Featured image by Currency.com)
