NOIDA (CoinChapter.com)— BNB has been on a downward spiral, plunging from $598.80 on August 23 to $502.10 by September 2, marking a steep 16.1% loss. The decline aligns with a broader drop in activity on the BNB Chain, which could be why Binance coin (BNB) coin price is down today.
As investors grow wary of BNB’s inability to reclaim its mid-June highs, concerns mount about the token’s outlook, especially as September kicks off with a bearish tone.
Bearish Cues Intensify as BNB Struggles in Sept.
BNB’s recent price action highlights a series of bearish cues that could weigh heavily on its performance throughout September. After dropping to a low of $502.10 on September 2, BNB recovered slightly, reaching a high near $539 on Sept. 3 before paring all its gains.
Furthermore, the overall sentiment remains cautious. Notably, the BNB Chain has seen a sharp decline in DEX volumes, plummeting by 24% in the week leading up to September 2. The decline outpaced Ethereum’s 4% drop in the same period, signaling that the BNB Chain is losing its competitive edge.
Moreover, the total value locked (TVL) in BNB Chain’s smart contracts fell by 14% over the past three months, with significant drops seen in key platforms like PancakeSwap and PinkSale.
These declines contrast sharply with the Ethereum and Solana networks, which have seen TVL growth during the same period. The weakening fundamentals on the BNB Chain suggest that investors might continue to look elsewhere for better opportunities.
Looking ahead to September, the BNB market could face additional pressure. Moreover, futures open interest has declined significantly since June, pointing to reduced speculative interest.
Furthermore, funding rates have remained negative for much of Aug., indicating that traders are betting on further downsides.
Bearish Setup Could Be Why BNB Price Is Down
Meanwhile, the BNB USD pair faces bearish risks from a technical setup called the ‘rising wedge.‘
The rising wedge pattern signals a potential reversal in the current trend. Identified by two upward-sloping lines converging towards each other, the resistance line ascends at a gentler slope than the support line.
The pattern forms during an upward trend with a series of higher highs and higher lows, indicating reduced buying momentum. As the wedge progresses, the distance between the resistance and support lines decreases, showing weakening momentum.
Typically, the rising wedge leads to a downward breakout. The price breaks below the support line, often with increased trading volume, signaling strong selling pressure.
Traders calculate the price target for the pattern by measuring the vertical distance between the wedge’s initial high and low points and subtracting this from the breakout point.
Per the rules of technical analysis, if the Binance Coin price breaks below the bearish pattern, the BNB USD pair might fall to the theoretical price target near $312, a drop of over 40% from current levels.
