The lawsuit filed by the SEC has dealt a heavy blow to BNB, the native token of crypto exchange Binance. Amid the steep decline in altcoin price, a giant whale started selling its BNBs. Crypto analyst David, on the other hand, says that BNB has broken down from the ascending triangle formation. In this context, the analyst warns of a sharp decline.
Longtime giant crypto whale sells BNBs on Binance
In a surprising turn of events, a crypto whale recently sold a substantial amount of Binance Coin (BNB) worth $2.3 million. This sale comes just a week after the US Securities and Exchange Commission (SEC) accused BNB and about 20 other tokens as unregistered securities. According to blockchain analytics firm Lookonchain, the whale has disposed of 10,000 BNB at a price of $230 per token. Thus, the whale received a total of $2.3 million from this sale. However, the whale still has 15,000 BNB in its wallet, equivalent to $3.5 million.
1/ A whale that has been dormant for 2 years sold 10,000 $BNB ($2.3M) at $230 today.
This whale was a #SAFEMOON whale before and made 110K $BNB ($47.5M at that time) with only 10 $BNB($2,400 at that time) on #SAFEMOON. pic.twitter.com/jxuBJBcWad
— Lookonchain (@lookonchain) June 12, 2023
It is worth noting that this whale bought 110,000 BNB from the SafeMoon platform for $47.5 million two years ago. Over time, the whale sold a significant portion of the tokens. Along with that, it has held 25,000 BNB in the last two years. Lookonchain’s tweet sheds light on the whale’s previous activities. Accordingly, he states that the whale initially purchased 10 BNB on SafeMoon, which later turned into 100 trillion SafeMoon tokens. Eventually, the whale sold most of its SafeMoon tokens for around 110,000 BNB at the peak price.
This whale’s awakening takes place against the backdrop of the US regulator’s lawsuit against Binance, Binance US, and its founder, CZ, for alleged securities law violations. In conclusion, cryptocoin.com As you follow, the price of BNB has dropped over 22% in the last seven days. The altcoin is currently trading around $233.
“ Bull trap setup: 50% risk for BNB to drop
BNB price has been trading inside an ascending triangle pattern since May 2022. This is a bullish pattern that leads to a breakout in most cases. However, the price of BNB has not been broken twice since then (green ellipse). This indicates that there is no buying pressure at higher levels. Indeed, after two failed attempts, altcoin price finally broke down from the triangle with a large bearish candle last week. The invalidation of a bullish pattern is usually followed by a significant drop. Because this is considered a bull trap.
A downward move equal to the height of the pattern when measured from the breakout would have brought the price of BNB down to $104. This corresponds to a decrease of more than 50% from the current level. Meanwhile, the weekly RSI indicator has dropped sharply below the 50 level. Also, it slopes downwards. Hence, it supports the possibility of further declines.
BNB weekly chart / Source TradingViewThe 4-hours RSI indicator has formed a significant bullish divergence in the oversold zone. Moreover, it broke above the resistance line. This signals a potential short-term recovery. In such a case, it is possible for BNB price to rise to the previous horizontal support level of $265.
However, candlesticks on the 4-hour timeframe are predominantly high-volume engulfing candles. This shows that bears are controlling the market. Therefore, it makes sense to view this as a dead cat bounce. BNB is likely to reverse towards the minor resistance levels at $240 and $254.
BNB 4-hour chart / Source: TradingViewThe most likely outlook suggests that the altcoin price will continue to decline in the near future. The optimal target for BNB stands at $104.
