New Delhi (CoinChapter.com) — Binance Coin(BNB) had a tumultuous time on Monday. It recovered by 79% to reach the $378-mark, before correcting to $360.72. The gains surfaced in a period that witnessed a full-scale exhibit of crypto market volatility, with many altcoins raking massive profits for their intraday traders.
On May 23, the Binance Coin dropped by 37.7% to $212.26 from the preceding day. Following this, it recovered by 79% to $378.79 on May 24. Unfortunately, this upward trend did not last long, as BNB took another fall today. At the time of writing, BNB was trading at $318, with the trend looking bearish.
According to a tweet by crypto-analyst Eric Theis, this was a dead cat bounce. A dead cat bounce is a short-term recovery of asset prices that are going through a downward trend. This recovery is, however temporary. Mr. Theiss also predicted ceilings for future bounces, capping them $350, $450, $520, and $570.
He speculated that BNB prices would decline further, with a $175 low being a possibility.
Binance Coin: A Fall From Sky
Binance Coin had reached an all-time high of $686.31 on May 10th. The cryptocurrency had shown steady growth over the past few weeks. But as bitcoin fell, it ensued panic across the altcoin market as well. Investors eventually lost $830 billion in last week’s cryptocurrency market crash.
Binance Coin continuing downward trend. Source: BNBUSDT on tradingview.com
BNB has shown an upward trend today as well but remains weak compared to yesterday. The overall trend is still downwards. It looks like the coin will have to wait for some time before rising again to the heights it scaled weeks ago.
Binance, the world’s largest crypto exchange by volume, launched Binance Coin in 2017. Thanks to partnerships and new listings, it enjoyed wide acceptance, becoming the third most valuable cryptocurrency by volume.
What Brought About The Downfall
As per speculations, the impetus behind the crash was two-fold. The first reason was Tesla’s decision to stop accepting Bitcoin payments. The company cited environmental concerns over the energy consumed in the mining of the flagship cryptocurrency.
The second reason was China’s recent crackdown on mining centers. The government said it was a result of efforts to control financial risks. This move may impact cryptocurrency’s adoption in other major economies as well.
The altcoin market saw a resurgence on Monday, with some altcoins like Polygon recording about 100% growth amid a strong resurgence. Interest in cryptocurrencies has swelled in the last few months, due to pandemic-induced economic issues. It will be some time before the market recovers, but going by past trends and investor sentiments, recovery is not that far around the corner.
Photo by Iván C. Fajardo on Unsplash Graph from tradingview.com