The Binance Coin (BNB) token has fallen for five days in a row despite the network suffering another major outage. It fell from a high of $611.4 on Oct. 29 to a low of $562, the lowest level since Oct. 14.
The BNB token’s retreat coincided with a drop in the Crypto Fear and Greed Index, which moved from a greed zone of 67 to a neutral level of 55 last week.
Most coins also experienced a sharp reversal. After rising to $73,500 last week, it fell to $68,430, causing a major drop among other coins. Ethereum fell to $2443 and may continue to fall, as I predicted.
Solana also fell below $160 and XRP fell to $0.50. In most periods, Bitcoin and most altcoins retreat when the fear and greed index moves lower.
US elections ahead
The first reason for the fall of the BNB token is the upcoming US elections, in which Donald Trump will face Kamala Harris on Tuesday.
Unlike other elections, polls show this election will be closer than expected. According to the New York Times, Harris leads the national average by less than 1 percentage point, meaning the two are virtually tied.
These two are even in Pennsylvania, while Donald Trump leads in Georgia, Nevada, Arizona and North Carolina with less than 3%.
So these polls mean that the outcome of the election is likely to go either way. However, polls have not been accurate in predicting US elections in the past. For example, in 2016, most polls predicted Hillary Clinton would be the eventual winner.
Likewise, before the last midterm elections, most polls predicted a complete Republican victory, which did not happen.
Meanwhile, the prediction market predicts that Trump will win the election. However, over the past few days, his chances at Polymarket have dropped sharply. These odds peaked at 67 last week and have now dropped to 55.
Ideally, the cryptocurrency market appears to favor Trump’s election victory due to his promise to create a lenient regulatory environment. One of his first steps will be to fire Gary Gensler and replace him with a more conservative SEC leader.
Another potential factor will be the Supreme Court, where Trump will appoint conservative judges. Historically, these judges have tended to favor business.
However, the reality is that cryptocurrencies like the BNB token will do well under both presidents. Additionally, cryptocurrencies have historically done well when either party is in power.
Binance Smart Chain is losing market share
Meanwhile, BNB tokens retreated even after developers conducted another large token burn that destroyed 1.77 million tokens worth over $1.07 billion.
A token burn is a situation where tokens are moved to an inaccessible wallet. This is one of the best ways to reduce the number of BNB tokens in circulation, making the remaining ones more valuable.
A token burn is the opposite of an unlock, where new tokens are released into the market. According to CoinGecko, there are 145 million BNB in circulation, with a maximum supply of 200 million.
Data shows that BNB Smart Chain has lost some market share in the decentralized finance (DeFi) industry. According to DeFi Llama, the BSC Chain DEX network processed $24 billion worth of tokens in October, which is far less than what Solana, Ethereum and Base processed.
BNB has processed $5 billion in the last seven days, making it the fourth largest network in the industry.
Additional data shows that Base is catching up with BNB in the DeFi industry, where it has a total value of $4.45 billion.
BNB Price Prediction
BNB chart from TradingView
The daily chart shows that the BNB token has pulled back over the past few days. This retreat came after it retested an important resistance level at $605, which it had not been able to rise above since June last year. This price is the horizontal part of an ascending triangle.
This is also the neck line of the inverted Head and Shoulders pattern, a popular reversal sign in the market.
The BNB token is between the 23.6% and 38.2% Fibonacci retracement levels. Thus, due to the inverse pattern of H&S, the coin is likely to make a bullish breakout and the next point to watch will be at $605.
A break above this level would indicate further gains, with the next level to watch being $720, the highest point this year, and 28% above current levels.
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