Binance Coin (BNB) Hits Reverse on News of SEC Investigation

Key Insights:

• Binance Coin (BNB) coughed up morning gains and slid into the deep red late in Monday’s session.
• News of the SEC investigating whether BNB was a security when sold back in 2017 weighed in the last hour.
• Technical indicators are bearish, with BNB sitting below the 50-day.

Through today’s morning session, Binance Coin (BNB) struck a day high of $312.12 before hitting reverse on news of an SEC investigation.

The early rally saw BNB break through the First Major Resistance Level at $303 and the Second Major Resistance Level at $306.

A late sell-off, however, saw BNB slide back through the Major Resistance Levels. BNB also fell through the First Major Support Level at $295 and the Second Major Support Level at $291 before returning to $293 levels.

News of the SEC investigating the world’s leading exchange Binance sent BNB into the deep red.

The Securities and Exchange Commission Investigating Binance

On Monday, Bloomberg reported on the “SEC investigating whether BNB was a security when sold in 2017.”

According to the Bloomberg report,

“US regulators are investigating whether Binance Holdings Ltd. broke securities rules by selling digital tokens just as the crypto exchange was getting off the ground five years ago.”

The report went on to say,

“The Securities and Exchange Commission’s review pries into the firm’s origins and those of BNB token, which is now the world’s fifth biggest. Investigators are examining if the 2017 initial coin offering amounted to the sale of a security that should have been registered with the agency.”

Binance reportedly responded by saying,

“It would not be appropriate for us to comment on our ongoing conversation with regulators, which include education, assistance, and voluntary responses to information requests.”

Binance added,

“We will continue to meet all requirements set by regulators.”

Today’s news has yet to have a similar impact on BNB as with XRP, which slumped by more than 70% on news of the SEC filing a complaint against Ripple Labs in 2020.

Binance Coin (BNB) Price Action

At the time of writing, BNB was down 1.85% to $293.16.

Technical Indicators

BNB will need to move through the First Major Support Level at $295 and the $299 pivot to retarget the First Major Resistance Level at $303.

BNB would need broader crypto market support to return to $300 levels.

Failure to move through the First Major Support Level and the pivot would bring the Second Major Support Level at $291 back into play. Barring another extended sell-off, BNB should avoid the day low of $287.24. The Third Major Support Level sits at $283.

Looking at the EMAs and the 4-hourly candlestick chart (above), it is a bearish signal. BNB sits below the 50-day EMA, currently at $304. This afternoon, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA; BNB price negative.

Failure to move back through the 50-day EMA will leave BNB under pressure and bring sub-$285 into play. Price action will now depend on news updates from the SEC investigation.