The recent trend in BNB price suggests that the token is experiencing a short-term decline after facing regulatory crackdowns. However, it is expected that this correction may persist for a longer duration than previous occurrences.
With the world’s leading crypto exchange by volume, Binance, facing the latest regulatory crackdown, investors have shifted their attention to this matter. On March 27, the United States Commodity Futures Trading Commission filed a lawsuit against Binance and its CEO, Changpeng “CZ” Zhao, alleging that the company illegally offered crypto derivative services to Americans and facilitated illicit financial activity.
As a result, BNB experienced its worst daily performance in over a month, dropping by over 5.5% to $305 on the day of the announcement. This is similar to what occurred on February 13, when its price dropped by over 5.8% due to another regulatory crackdown involving Binance-branded stablecoin, Binance USD (BUSD).
Despite CZ refuting the CFTC’s allegations, the BNB/USD pair is at risk of further decline due to its response to regulatory actions in the past. For example, the New York regulator’s crackdown on BUSD in February 2023 resulted in a 15%+ BNB price decline.
Likewise, BNB plunged by up to 10.75% in July 2022, after the Dutch Central Bank fined Binance $3.4 million for offering unlicensed crypto services. It also dropped by 25% in February 2022, after Binance halted its operations in Israel, fearing a crackdown.
The Binance-CFTC FUD has triggered a bearish reversal setup, similar to what was experienced in February, involving a rising wedge pattern. This breakdown could result in a 25% price correction towards $250 by the end of March. Furthermore, BNB is also expected to experience an extended price decline towards $200, following the formation of another rising wedge pattern on the daily chart. Hence, it is likely that BNB’s price may drop by as much as 30% by April, measured from current price levels.
