Key takeaways:
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BNB faces short-term correction risks but maintains a bullish macro structure.
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A bull flag is still in play, pointing to a BNB price target above $2,000.
BNB (BNB) has dropped 10% over the last 24 hours, reflecting the risk-off sentiment in the broader crypto market.
With a 13% drawdown from its $1,300 all-time high reached on Monday, the question remains whether the upside is over for the Binance-linked token.
BNB faces “overbought” risks
The BNB/USD pair has hit multiple all-time highs since late July, pushing the relative strength index (RSI) on the weekly chart into overbought territory, raising the risk of a short-term pullback.
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The RSI reached 81 last week before dropping to its current level of 71. These elevated levels are historically associated with significant price pullbacks, as seen in 2021 (a 70% drop) and July 2024 (a 44% pullback).
A correction toward the psychological level at $1,000 looks increasingly likely in the coming days, if the recent overbought declines are any indication.
BNB’s decline could extend toward the $730-$860 zone, where the 20-week simple moving average (SMA) and the 50-week SMA currently sit. These trendlines have provided reliable support during recent pullbacks.
BNB’s RSI is “currently in the overbought range across multiple periods,” analyst Saint wrote in an X post, adding:
“This indicates potential for price correction, which could lead to a consolidation or a pullback.”
BNB price may drop to $1,000
A double-top formation on BNB’s four-hour chart projects a return to the pattern’s neckline at $1,000, as shown below. Such a move would bring the total losses to 17% from the current levels.
The odds of a potential short-term pullback in BNB price are magnified 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 Monday, the RSI printed lower highs.
A divergence between rising prices and a falling RSI usually indicates weakness in the prevailing uptrend, prompting traders to sell more at local highs as profit-taking intensifies and buyer exhaustion sets in.
Is the BNB price in a technical correction?
Despite today’s pullback, analysts are convinced that BNB bulls are still in control, based on the price action in higher time frames.
Data from Cointelegraph Markets Pro and TradingView indicates that the price remains bullish in the monthly time frame, with a bull flag that has been in effect since October 2023, suggesting that BNB could rise as high as $2,100.
Such a move would represent 73% gains from the current price.
Several analysts remain convinced that BNB still has room to run, with the $2,000 target not “far away.”
“$BNB is still looking strong after the crash,” analyst Henry said in an X post, adding:
“Looks like BNB will flip ETH soon if it goes at the same speed. Next target is $2k, not much, far away. New ATH loading.”
Fellow analyst CoinCentral said several factors, including Binance’s $283 million payout to affected users and high network activity, could add to the tailwinds BNB needs to sustain the bull run.
“Analysts eye $2,000 target next.”
As Cointelegraph reported, a daily candlestick close above $1,350 would signal that the bulls remain in control, with the BNB/USDT pair may then rally to $1,600 and beyond.
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.
