Key points:
BNB is experiencing short-term correction risks but continues to show a bullish macro trend.
A bull flag remains intact, indicating a potential BNB price target above $2,000.
BNB (BNB) has seen a 10% decline in the past 24 hours, reflecting a risk-averse sentiment in the wider crypto market.
With a 13% retracement from its all-time high of $1,300 reached on Monday, one wonders if the upward momentum for the Binance-linked token has waned.
BNB encounters “overbought” concerns
The BNB/USD pair has recorded multiple all-time highs since late July, elevating the relative strength index (RSI) on the weekly chart into the overbought zone, suggesting the possibility of a short-term retracement.
Related: A state-backed crypto fund has executed its first purchase — and it wasn’t Bitcoin
The RSI peaked at 81 last week before settling to 71. Historically, such elevated figures correlate with substantial price corrections, as evidenced in 2021 (a 70% drop) and July 2024 (a 44% decrease).
A correction towards the psychological level at $1,000 seems increasingly probable if recent overbought trends are any indication.
The decline in BNB could reach the $730-$860 zone, where the 20-week simple moving average (SMA) and the 50-week SMA are currently positioned. These trendlines have consistently offered solid support during recent downtrends.
As noted by analyst Saint in an X post, BNB’s RSI is “currently in the overbought range across various periods,” adding:
“This suggests potential for a price correction, which could lead to consolidation or a pullback.”
BNB price may retreat to $1,000
A double-top pattern observed on BNB’s four-hour chart predicts a return to the neckline around $1,000, as illustrated below. Such a movement would yield a total drop of 17% from current levels.
The likelihood of a short-term pullback in BNB’s price is amplified by a developing bearish divergence between its price and the RSI.
The chart reveals that while the BNB/USD pair recorded higher highs between Oct. 7 and Monday, the RSI marked lower highs.
A divergence where prices rise alongside a declining RSI generally signals weakness in the active uptrend, leading traders to sell more at local peaks as profit-taking intensifies and buyer fatigue sets in.
Is BNB’s price in a technical correction?
Despite today’s decline, analysts maintain that BNB bulls are still dominant, based on the price movements observed in higher time frames.
Data from Cointelegraph Markets Pro and TradingView indicates that the price remains bullish on the monthly chart, with a bull flag that has been in place since October 2023, suggesting BNB could rise towards $2,100.
This movement would symbolize a 73% increase from the current price.
Many analysts remain optimistic that BNB has potential for further gains, believing the $2,000 target is not “far off.”
“$BNB is still looking resilient post-crash,” analyst Henry remarked in an X post, adding:
“It seems like BNB may soon surpass ETH if it continues at this pace. The next target is $2k, which is not far away. New ATH loading.”
Another analyst, CoinCentral noted that various factors, including Binance’s $283 million payout to affected users and significant network activity, could bolster the momentum BNB needs to sustain its bullish trend.
“Analysts are targeting $2,000 next.”
As Cointelegraph reported, a daily candlestick close above $1,350 would indicate that the bulls maintain control, potentially allowing the BNB/USDT pair to rally to $1,600 and beyond.
This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own research before deciding.
