BNB's Struggles to Sustain Its Momentum
Analyzing the weekly timeframe reveals that BNB's price encountered a significant bounce off a long-term horizontal support area back in June 2022 (marked by the green icon). Since then, it has managed to stay above this critical level.
However, there was a brief dip below this support zone in July 2023 (indicated by the green circle), but the price swiftly reclaimed its position above it, leading to a subsequent uptrend.
Last week, BNB experienced a price surge, reaching as high as $275. Unfortunately, it couldn't maintain this upward trajectory and ended up forming a bearish candlestick pattern characterized by a long upper wick.
It's worth noting that this price decline occurred shortly after Binance CEO Changpeng Zhao resigned due to a hefty fine of over $4 billion imposed by the U.S. Department of Justice.
BNB/USDT Weekly Chart. Source: TradingView
Traders often rely on the Relative Strength Index (RSI) as a momentum indicator to identify potential overbought or oversold conditions and make decisions regarding asset accumulation or selling.
When the RSI readings are above 50 and trending upwards, it suggests that bulls still have control, whereas readings below 50 indicate the opposite. In this case, the weekly RSI was rejected at the 50 mark, coinciding with the price drop from $275.
The Influence of Binance Wallet
On November 11, Binance introduced the Binance Web3 Wallet, a secure self-custodial cryptocurrency wallet seamlessly integrated with the Binance app.
This wallet boasts various innovative features, with a key highlight being its ability to facilitate cross-chain token swaps via the Binance bridge.
To help users navigate these functionalities, the Binance team shared a tutorial on the social media platform X.
Mark Venables, the founder of Crypto Merchant, emphasized the transformative impact of Binance's Web3 wallet on self-custody within the crypto market in a conversation with BeInCrypto. He highlighted its potential to enhance security, promote financial autonomy, enable interoperability, foster innovation, and offer educational opportunities. These attributes empower users, giving them greater control over digital assets and advancing blockchain technology.
Delving into the concept of self-custody, Venables discussed how Binance's Web3 wallet strikes a balance between user-friendly design and individual responsibility. He emphasized the wallet's user-centric approach and measures to ensure users take full responsibility for their digital assets.
Through a secure interface, key management, education, and support, Binance achieves a harmonious blend of usability and user empowerment.
Venables also explored the technological innovation within Binance's Web3 wallet, particularly Multi-Party Computation (MPC). He described MPC as a cryptographic technique that allows multiple parties to jointly compute a function without revealing their individual inputs. In the context of self-custody wallets like Binance's Web3 wallet, MPC introduces a new level of security and accessibility to cryptocurrency storage.
According to Venables, MPC has the potential to distribute key management responsibilities, enhancing user asset security while simplifying the user experience for broader accessibility. Its adoption paves the way for additional features and functionalities, further enriching the self-custody wallet space.
BNB Price Prediction: Recovery or Downturn?
While the weekly timeframe presents a predominantly bearish outlook, the daily timeframe offers hope for a potential trend reversal.
On the daily chart, BNB's price has managed to stay above the minor horizontal support level at $225 and could potentially form a double bottom pattern, which is generally considered bullish (marked by green icons).
Additionally, the daily RSI has signaled a hidden bullish divergence, a strong indicator of a continued uptrend. However, it's important to note that the RSI is currently falling and is below the 50 mark. If BNB's price experiences a bounce, it could potentially rise by 13% and reach the next resistance level at $260.
Despite this optimistic BNB price prediction, a daily close below the $225 support area would indicate an ongoing correction. In such a scenario, a decline of 11% to the nearest support zone at $205 could follow.
