• FTX’s collapse caused Binance Coin (BNB) to suffer a temporary loss of trust and excessive price losses.
• BNB has since risen 9.3% over the last seven days and is now facing a bearish pattern on the weekly chart.
• If BNB breaks the neckline at $210 to the downside, BNB could see a downtrend within the next few weeks, pushing the price toward $153.
The world of cryptocurrency was rocked by the collapse of FTX, one of the largest exchanges in the space. Following the news, investors quickly turned their attention to the now undisputed largest crypto exchange, Binance. BNB, the exchange’s native token, suffered a temporary loss of trust and experienced heavy price losses due to the fallout. However, in recent days, the BNB price has been recovering and is now up 9.3% over the past seven days, trading at $301 at the time of writing.
While the market sentiment is generally bullish and there have been some positive developments from Binance in recent days, the BNB chart is in a precarious situation. On the weekly chart, a bearish pattern is forming which often indicates a trend reversal. This pattern typically consists of three peaks, with the two outer ones close to each other and the middle peak being the highest. The left shoulder forms when investors drive the price up, and then temporarily lose their enthusiasm. The head is formed when enthusiasm reaches its peak, and the right shoulder is formed when the price rises again, but does not reach its previous peak before falling again.
The head of the BNB weekly chart was formed in the week when FTX filed for bankruptcy, and since then the price has been in decline. Now, the BNB price is facing a crucial scenario. If BNB breaks the neckline at $210 to the downside, it could validate the bearish pattern and BNB could see a downtrend within the next few weeks, pushing the price toward $153.