BNB Price Faces Potential Drop to $700 Amid Declining BSC Metrics

Binance Coin (BNB) witnessed a price decline exceeding 1% on December 29, as the broader crypto market remained under pressure. Currently trading at $850, BNB has significantly dropped from its year-to-date high of $1,375. Technical analysis suggests a possible further decline to the $700 support level as risky patterns emerge and critical metrics like transactions and futures open interest plummet.

Technical Analysis Indicates Bearish Outlook for BNB

The daily chart reveals that BNB has experienced a sell-off in recent months, negating earlier gains when it hit a peak of $1,376. The formation of a bearish pennant pattern suggests potential further declines, with the token hovering around the 61.8% Fibonacci Retracement level. BNB remains below the Supertrend indicator and the 50-day Exponential Moving Average (EMA), pointing to a bearish outlook. The next critical target is $700, near the 78.6% Fibonacci Retracement level, about 20% below the current price. Conversely, a rise above the 50% Fibonacci Retracement level at $945 would challenge the bearish forecast.

Declining BSC Metrics Signal Weak Demand

BNB's price is under significant pressure due to declining demand, as evidenced by a sharp drop in daily trading volume to $1 billion from over $15 billion earlier this year. The futures market reflects a similar trend, with open interest falling from $2.7 billion in October to $1.26 billion, following a major liquidation event on October 10. Additionally, network transaction activity has decreased by 80% over the past 30 days, with transactions down to 400 million. This decline in activity and DeFi participation has resulted in a 14% drop in total fees to $14 million, leading to fewer BNB tokens being burned.