BNB (BNB), the native token of BNB Chain, is extending its impressive recovery streak for the third consecutive week. With nearly 10% weekly gains so far—bolstered by a 5.65% surge in the past 24 hours—BNB has soared to approximately $585 on Aug. 22.
Key factors fueling BNB’s price surge today and over the past few weeks include Binance’s strategic expansion of its compliance team, growing anticipation of potential interest rate cuts in the United States, and several other market-moving developments.
Binance aims to increase compliance workforce
Today’s BNB rally aligns with Binance’s announcement to significantly bolster its compliance team in 2024. CEO Richard Teng highlighted that at least 20% of the new hires will be dedicated to strengthening the company’s regulatory compliance efforts.
The announcement comes almost a week after three crypto investors filed a class-action lawsuit against Binance and its former CEO, Changpeng “CZ” Zhao. They allege they could not recover their stolen assets due to Binance’s failure to prevent money laundering.
Over the past year, Binance has faced significant pressure from regulators in major markets, including the US, Europe, and Asia, due to concerns about Anti-Money Laundering (AML) practices and consumer protection.
Related: Court allows most SEC claims to proceed in Binance suit
Binance’s decision to expand its compliance team will likely enhance its reputation and operational stability, thus attracting more users and institutional investors to its platform. This could increase BNB’s perceived safety and legitimacy, driving demand for the token and contributing to its price rally.
Federal Reserve minutes boost crypto demand
BNB’s price is rallying as investors anticipate a dovish shift in US monetary policy, indicated by recent Federal Reserve minutes.
Several Fed officials acknowledged a plausible case for cutting interest rates in September due to progress on inflation and rising unemployment. As a result, bond traders now see a 73.5% probability of a 25 basis point rate cut in September versus 62% a day ago.
Lower interest rates reduce the opportunity cost of holding yielding assets like the US Treasury notes, benefiting non-yielding risky assets like stocks and crypto instead.
BNB short liquidations outnumber longs
BNB’s price rise has accelerated further due to a higher amount of short liquidations versus the long ones since the Aug. 5 crypto market rout, according to data resource Coinglass.
Notably, the BNB futures market has witnessed short liquidations worth by over $7.21 million since then, compared to $3.86 million in long liquidations. In other words, many bearish traders, who expected BNB’s price to fall, have been forced to exit their positions as the market moved against them.
These short liquidations occur when traders must buy back BNB to cover their losses, creating upward pressure on the price.
BNB technicals indicate bullish exhaustion
From a technical perspective, BNB’s gains are part of price actions occurring inside its rising wedge pattern, characterized by two converging, ascending trendlines.
Nonetheless, rising wedges are considered bearish reversal patterns, which resolve when the price breaks below the lower trendline and falls by as much as the maximum distance between the upper and the lower trendline.
Applying the same technical analysis to BNB’s price chart presents $586 as a potential breakdown point. If BNB breaks below this level with increasing trading volume, it could signal a further decline, potentially targeting $480 as the rising wedge breakdown target in August.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.