BNB Price Hits $715 All-time High, Beats Solana to $100B Valuation

BNB price broke the $700 barrier on Wednesday, June 5, 2024, to reach a new all-time high for the first time since November 2021; as bulls prepare to take profits, BNB appears at risk of a major correction phase.

BNB price Records $715 All-time High

Binance, the world’s largest cryptocurrency exchange, has been subject to extensive regulatory pressure over the past two years. While battling bans in countries like China, Nigeria, and the Philippines, Binance has also been locked in a $4.6 billion settlement lawsuit with the US authorities. 

Binance has adversely affected its entire ecosystem. Daily trading volumes on the exchange dropped, allowing Coinbase and BitGet and other competitors to encroach market share, while the growth of Binance’s native BNB chain and BNB coin also slowed. 

However, there has been a resurgence of bullish momentum within the Binance ecosystem as the prolonged case with the US SEC finally reached a conclusion. 

Binance ex-CEO Changpeng Zhao began a 4-month prison sentence in California, far more lenient than the 3-year jail term sought by prosecutors.

CZ’s sentencing effectively marks the end of a protracted legal battle, and curiously, it has triggered bullish reactions across the BNB markets. 

As vividly illustrates above, BNB price has increased 21% between June 1 and June 5, hitting an all-time high of $715 by June 5m before retracing 2% towards the $697 area at the time of writing on June 6.  

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This landmark achievement means that BNB has now overtaken Solana (SOL) to become only the 4th crypto asset to cross the coveted $100 billion mark, behind Bitcoin, Ethereum, and USDT.

Interestingly, this close convergence between BNB’s price rally and Zhao’s prison term suggests the resolution of the case had catalyzed a considerable influx of LONG positions in the derivatives markets. 

Coinglass’ futures open interest chart above, which monitors the total capital invested speculative contracts, BNB’s open interest was $594 million as of May 31. 

Curiously, since Zhao’s prison term began, speculative traders have significantly increased their capital inflows. By June 5, BNB’s open interest had reached $1.01 billion, a substantial $405 million rise. Although BNB’s price increased by 21.28% over five days, open interest surged by 68%.

When there’s a faster rise in open interest compared to the price uptrend, strategic traders often interpret is as an early indication that the market trend is nearing its peak.

This rapid increase in open interest could mean that this week’s BNB price rally has been driven mainly by the activities of speculative traders. Hence, BNB’s open interest, which is $1.01 billion, poses a risk of significant liquidations and sharp downward movement if traders begin to take profits in the near term.

BNB Price Forecast: Bears Eyeing $650 Reverse

BNB is currently exchanging hands at an all-time high of around $700 as of June 6. However, the speculative contracts surging $400 million indicate a potential profit-taking wave could trigger a sharp near-term decline towards the $600 level.

In terms of short-term support area to monitor, the Bollinger upper-band technical indicator currently marks the $670 price level as a potential trend reversal point. 

But, should the profit-taking trigger widespread LONG liquidations as predicted, BNB’s price could quickly retrace to the 20-day SMA price level at $608.

Conversely, if upward momentum continues, bulls could attempt to push the rally toward the $750 level, especially if the upcoming Non-Farm Payrolls report on Friday, June 7, 2024, provides a positive outcome for risk assets.