Key insights:
BNB (BNB) has struggled to maintain its impressive rally, facing two rejections near the $1,350 mark in the last week, indicating a potential pullback in October.
Double top formation suggests 30% correction risks for BNB
The daily chart of BNB showcases a classic double top pattern around the $1,350-$1,375 range, suggesting possible trend exhaustion following a 95% rally year-to-date.
The two peaks, marked as Top 1 and Top 2 below, indicate unsuccessful breakout attempts, with the neckline support at approximately $1,100. A significant close below this neckline could confirm the double top pattern.
If so, BNB could decline by as much as the pattern’s height, targeting around $835. This would represent a nearly 30% retracement from current levels by late October or early November.
Momentum indicators are signaling caution, including the daily relative strength index (RSI), which has entered a correction phase after retreating from overbought levels above 70.
Additionally, BNB’s Moving Average Convergence Divergence (MACD) lines show a bearish crossover, indicating a waning buying strength, with bearish momentum possibly intensifying if BNB falls below the $1,100 support.
Binance’s $21.75 billion outflows increase BNB threats
Binance faced record user withdrawals of $21.75 billion from a centralized exchange in the last week, including $4.1 billion in just one day, according to data from CoinGlass.
This mass exodus followed the Oct. 10 liquidation crisis, where Binance’s internal oracles mispriced crucial collateral assets, leading to a wave of margin calls.
As of Wednesday, Binance’s daily outflows had decreased, but the seven-day balance remains down by $3.69 billion.
Some analysts now suggest that the $20 billion liquidation event was a deliberate attack on Binance’s Unified Account margin system.
Dr. Martin Hiesboeck, head of research at Uphold, stated in a Monday post that attackers exploited vulnerabilities in Binance’s margin system, resulting in losses between $500 million and $1 billion.
He referred to the incident as “Luna 2.”
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The accusations appeared as BNB faced rejections in the $1,350-$1,375 area on Monday, reflecting shaken market confidence despite Binance’s announcement of a $400 million relief package.
Remaining possibilities for BNB bulls
BNB continues to trade above essential exponential moving average (EMA) supports, including the 20-day EMA (the green wave) near $1,155 and the 50-day EMA (the red wave) around $1,042.
A bounce from these EMAs, establishing them as new support, could negate the double top pattern. In such a scenario, the price discovery range would sit just above the $1,350 level, which remains under consideration for October.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
