BNB Bulls Beware! Indicator That Preceded 70% Price Crash Returns

This decline was a precursor to the development of a bearish divergence between the cryptocurrency’s rising prices and falling weekly relative strength index (RSI). A bearish divergence is a warning sign that the bullish trend may be losing momentum, and a potential reversal to the downside could be imminent.

A similar bearish divergence between BNB’s price and its weekly RSI emerged between March and June 2024. This divergence is becoming evident as the market undergoes the current price correction.

Essentially, BNB’s price has entered the early correction phase reminiscent of the 2021 fractal. If this pattern continues, BNB may drop sharply toward the 50-week EMA of around $425—down about 40% from the current price levels—by July or August.

A Final Dip Before Bullish Continuation: Analyst

A 40% crash from the current price levels does not necessarily constitute the beginning of a bear market. Instead, it could be an opportunity for traders to buy the dip in anticipation of a sharp bullish rebound, suggests independent market analyst ‘Rags to Riches’ on X.

The analyst highlights BNB’s significant recovery after its 70% crash in 2021, which subsequently provided over 200% returns for traders who bought the cryptocurrency at its then low of $211.