BNB price coils within a falling wedge, can it recover from its October losses?

BNB price shaped a falling wedge pattern as it remained in a downtrend since mid-October. Will a breakout from the bearish reversal pattern help it claw back all the losses it racked up since hitting its October high?

According to data from crypto.news, BNB (BNB) price was trading at $957.5 at last check on Nov. 12, down 2% in the past 24 hours and 30% below its highest point in October when it hit $1369.85.

BNB’s price fell as user activity on the BNB Chain continued to decline. Data from BscScan shows that the number of transactions on the blockchain has dropped from 31 million on Oct. 8 to below 16 million at press time.

Declining transactions on the network typically indicate reduced engagement from users and developers, which leads to lower demand for the token and weakens overall network utility.

Demand across its derivatives market has also gone through a sharp decline, plunging from an all-time high of $2.97 billion to $1.35 billion over the same period.

Moreover, the long-to-short ratio dropped below 1 in the past 24 hours, meaning a larger proportion of traders were positioning for further downside. This shift reflects growing bearish sentiment around BNB’s outlook, which could continue to pressure its price in the short term.

The daily chart shows that BNB price has maintained its downtrend for most of the days since its drop from the October high and has formed a falling wedge pattern, which is considered a bearish reversal pattern in technical analysis. 

At press time, BNB was hovering close to the upper trendline of the pattern, eyeing a potential bullish breakout from the pattern at around the $1,000 level, which also stands as the next key psychological resistance for the token. 

A decisive breakout from it could push it towards $1,100 or even $1,300, a target measured by adding the length of the falling wedge pattern to the price at which the breakout could potentially take place. 

As such, BNB price would recover most of its losses if the target is met.

However, it should be noted that at press time, other technical indicators such as the MACD lines and the RSI (below 40) were still largely bearish, suggesting that the altcoin could see some losses on the way before its next leg higher.