Key takeaways:
BNB is experiencing short-term correction risks while still showing a bullish macro trend.
A bull flag remains intact, suggesting a BNB price target above $2,000.
BNB (BNB) has decreased by 10% in the past 24 hours, mirroring the cautious sentiment in the larger crypto market.
With a 13% decline from its $1,300 all-time high achieved on Monday, speculation arises regarding whether the upside for the Binance-related token has ended.
BNB encounters “overbought” risks
The BNB/USD pair has reached multiple all-time highs since late July, causing the relative strength index (RSI) on the weekly chart to enter overbought territory, heightening the potential for a short-term correction.
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The RSI peaked at 81 last week before falling to its current level of 71. Historically, these elevated levels correlate with significant price decreases, as witnessed in 2021 (a 70% drop) and July 2024 (a 44% pullback).
A correction toward the psychological level at $1,000 seems increasingly probable in the upcoming days, based on the recent overbought signals.
BNB’s decline could extend towards the $730-$860 range, where both the 20-week simple moving average (SMA) and the 50-week SMA are currently positioned. These trendlines have historically served as strong support during recent corrections.
BNB’s RSI is “currently in the overbought zone across various periods,” analyst Saint wrote in a post on X, adding:
“This signals the possibility for a price correction, which might lead to consolidation or a pullback.”
BNB price may retreat to $1,000
A double-top pattern on BNB’s four-hour chart indicates a potential return to the pattern’s neckline at $1,000, as illustrated below. This move would result in total losses of 17% from current levels.
The likelihood of a short-term pullback in BNB price is amplified by a growing bearish divergence between its price and the RSI.
The chart above shows that while the BNB/USD pair formed higher highs between Oct. 7 and Oct. 13, the RSI recorded lower highs.
A divergence seen when prices are rising but the RSI is falling generally signals weakness in the current uptrend, which may encourage traders to sell at local highs as profit-taking escalates and buyer fatigue sets in.
Is the BNB price undergoing a technical correction?
Despite today’s downturn, analysts believe that BNB bulls remain in control, based on the price action observed in higher time frames.
Data from Cointelegraph Markets Pro and TradingView suggests that the price continues to be bullish within the monthly time frame, with a bull flag in play since October 2023, indicating that BNB could rise to as high as $2,100.
This move would signify a 73% increase from the current price.
Several analysts remain optimistic that BNB still has potential for growth, with the $2,000 target not seen as distant.
“$BNB is still looking robust after the downturn,” analyst Henry stated in a post on X, adding:
“It looks like BNB will surpass ETH soon if it continues at this pace. Next target is $2k, not far away. New ATH loading.”
Another analyst, CoinCentral mentioned that various factors, including Binance’s $283 million payout to impacted users and increased network activity, could provide the momentum BNB needs to maintain its bullish trend.
“Analysts target $2,000 next.”
As reported by Cointelegraph, a daily candlestick close above $1,350 would indicate that bulls remain dominant, potentially allowing the BNB/USDT pair to surge to $1,600 and beyond.
This article does not offer investment advice or recommendations. Every investment and trading maneuver involves risk, and readers should conduct their own research before making any decisions.
