Binance Coin (BNB) has experienced a significant decline in price this week as both the cryptocurrency and stock industries have faced worsening sentiment. The BNB token dropped to a low of $600 on Tuesday, down from its previous all-time high of $724.
The decline in Binance Coin can be attributed to investors adopting a risk-off sentiment following the release of strong nonfarm payrolls (NFP) data last week. This downward trend aligns with Bitcoin nearing the $65,000 mark and Ethereum falling below $3,500. Additionally, the overall market capitalization of digital coins has dropped by over 3% in the past 24 hours, while the crypto fear and greed index has decreased to 60.
This decline can also be attributed to anticipation surrounding the Federal Reserve’s decision on Wednesday. Analysts expect the central bank to maintain interest rates between 5.25% and 5.50% and to indicate that future rate cuts will be dependent on data. Federal Reserve Chair Jerome Powell has previously stated that the bank requires additional evidence that inflation is moving towards its target of 2.0%.
The recent crash of Binance Coin is a stark reversal from last week, when it reached a record high of $725. At its peak, the token had a market capitalization of over $106 billion, surpassing well-known companies such as Deere, KKR, Palo Alto Networks, and ADP.
The decline in the BNB token’s price has coincided with a decrease in futures open interest, which has fallen from a high of $1 billion last week to $706 million.
Analyzing the daily chart, it is evident that the BNB token price has plummeted from $724 to the psychological level of $600. It has reached the 23.6% Fibonacci Retracement point and breached the key support level at $645, which was its highest point on March 16th.
Despite the decline, Binance Coin has managed to remain above both the 50-day and 100-day Exponential Moving Averages (EMA). However, the two lines of the MACD indicator have formed a bearish crossover, and the histogram has dropped below the neutral level.
Therefore, it is likely that the token will experience a period of consolidation before resuming its bullish trend. If this occurs, there is a high possibility that it will retest the all-time high of $725, either by the end of this week or the following week.