BNB Price News: BNB Still Risks 12% Drop Despite ETF Launch

BNB (BNB) managed to temporarily defy the market’s gravity after the launch of the first exchange-traded fund (ETF) in the United States for this token.

However, it was unable to escape the turmoil and went on to drop for 6 days in a row, fully erasing the gains produced by the news.

Now, the token is retesting the $600 psychological support and could drop another 12% if bearish momentum accelerates.

BNB ETF Failed to Draw Attention from Investors in the U.S.

According to data from VanEck, investors have only poured around $2 million in net inflows into this vehicle. Weak interest in the fund may have backstopped the rally, as traders realized that Wall Street was not as attracted to BNB as they expected.

Compared to other ETFs linked to XRP (XRP) and Solana (SOL), VanEck’s BNB ETF is hundreds of millions away from hitting a similar level in assets under management (AUM).

The timing to launch this ETF could not be worse, as the crypto market is tanking. BNB alone has shed nearly 32% of its value since the year started.

However, its losses have been milder compared to SOL and XRP, as BNB benefits from the persistent demand that comes from Binance’s huge ecosystem, which includes its exchange and Web 3 wallet.

This token has managed to surpass both of its closest rivals in terms of market cap as well, and has distanced itself from XRP by $5 billion already while doubling SOL’s aggregated value.

Based on this gap between BNB and other top altcoins, we may expect increased interest in VanEck’s BNB ETF down the road, especially if the price keeps dropping, as market participants could turn to this vehicle to buy the token at bargain prices.

Market sentiment remains heavily depressed as macroeconomic conditions have deteriorated. Rapidly rising inflation levels in the United States have prompted analysts to revisit their expectations for interest rate decisions this year.

The consensus is that the Federal Reserve will likely increase rates by 25 basis points in September, departing from the baseline scenario at the beginning of the year, which consisted of one or two expected rate cuts.

As a result, we lean toward a bearish BNB price prediction. If we lose the $600 area, we could expect a 12% drop to $520 in the near term.

BNB Needs to Stay Above $600 to Avoid a Much Bigger Drop

Right now, BNB bounced off the $600 demand zone, indicating that buyers are still seeing the latest decline as an opportunity to grab some tokens at a low price.

Keep in mind that BNB is currently trading 56% below its all-time high, even though its ecosystem is as robust as it was a few months ago.

We also keep tracking a historical buy signal in the weekly chart that came up in February this year, as the Relative Strength Index (RSI) dipped below 35. The price of BNB is still sitting above its 200-week EMA, which increases the odds of a recovery.

If this signal delivers similar results compared to previous cycles, we could expect a retest of BNB’s previous all-time high over the next few months. However, if BNB breaks below that EMA and drops to $520, we may expect a much stronger drop to at least $400 in the near term.