BNB Bulls Beware! Indicator That Preceded 70% Price Crash Returns

BNB (BNB) price has corrected by nearly 17% a week after establishing a record high at around $725 and was trading for around $610 as of June 11. Nonetheless, per a fractal indicator, the cryptocurrency has more room to decline in the coming weeks. Let’s discuss the bearish setup in detail.

BNB Price Prediction: 2021 Fractal Indicates Massive Crash by July/August

BNB (BNB) investors need to be prepared for a potential major price correction in the coming weeks. The current price pattern closely resembles those that preceded a 70% market crash in 2021. This is a significant development that should not be overlooked, as it could have a substantial impact on BNB’s value.

Notably, BNB’s price significantly dropped from $700 on May 10, 2021, to around $211 a week later, a level closer to its 50-week exponential moving average (50-week EMA; the red wave in the chart below).

This decline was a precursor to the development of a bearish divergence between the cryptocurrency’s rising prices and falling weekly relative strength index (RSI). A bearish divergence is a warning sign that the bullish trend may be losing momentum, and a potential reversal to the downside could be imminent.

A similar bearish divergence between BNB’s price and its weekly RSI emerged between March and June 2024. This divergence is becoming evident as the market undergoes the current price correction.

Essentially, BNB’s price has entered the early correction phase reminiscent of the 2021 fractal. If this pattern continues, BNB may drop sharply toward the 50-week EMA of around $425—down about 40% from the current price levels—by July or August.

A Final Dip Before Bullish Continuation: Analyst

A 40% crash from the current price levels does not necessarily constitute the beginning of a bear market. Instead, it could be an opportunity for traders to buy the dip in anticipation of a sharp bullish rebound, suggests independent market analyst ‘Rags to Riches’ on X.

The analyst highlights BNB’s significant recovery after its 70% crash in 2021, which subsequently provided over 200% returns for traders who bought the cryptocurrency at its then low of $211.

He further spotted similar buying opportunities in the Cardano (ADA) and Cosmos (ATOM) markets, saying that traders should “HODL and buy more.”

As of June 11, BNB was consolidating inside its 1.00 and 0.786 Fibonacci retracement level range, defined by $693 as resistance and $584 as support, respectively. A decisive decline below $584 could have BNB price retest its multi-month ascending trendline support, which, interestingly, aligns with the 50-week EMA downside target of $425 as mentioned above.

Conversely, a break above the $693-resistance accompanying a rise in trading volumes may invalidate the bearish fractal setup altogether. Instead, the BNB price may rally toward $1,000 next, coinciding with the 1.618 Fib retracement line.