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BNB Price Prediction: Binance at risk of dropping back to $250 on back of BoJ event

  • Binance Coin price was very much exposed to the Bank of Japan monetary policy decision overnight.
  • BNB could see its rally trashed and price action crash toward $250.
  • Traders must have a trading plan from now on to contain losses overnight.

Binance Coin (BNB) price is at risk of a very big monetary and political shift in global markets as the Bank of Japan is set to communicate overnight. The risk can be measured up to the dissolving floor of the Swiss Franc against the Euro and the US Dollar or the cap on the Czech Koruna against the Euro and US Dollar. This time the Bank of Japan could be letting loose its yield curve control after a decade and leave markets on their own with no active buyer anymore. Japanese yields are at risk of jumping massively, triggering a sell-off in risk assets across the board.

Binance Coin price first in line to get slaughtered

Binance Coin price can get a beating on the back of this risk event. The Bank of Japan has been an active buyer for almost a decade now in order not to let yields rise too high, to keep lending cheap for Japanese companies, and give its currency a competitive advantage for its exports. Should the BOJ let go of that control, markets would lose a massive certainty and reach an impasse as sellers and sell orders would remain unmatched against a handful of buyers. Japanese yields should be higher, making the currency stronger and triggering risk across the globe as traders would need to manage massive portfolio reshuffles and write-offs on the back of this event.

BNB will be among the first victims on the chopping block as traders head for the exit on any risk asset. Equities and cryptocurrencies would see a blood-red day, possibly even the worst of the past two years, as this seismic shift at the central bank would trigger massive recession fears. Binance Coin price looks to hold with that backdrop a fair value near $250. This would not completely erode this early rally of 2023 but would still pair back roughly 17% worth of gains. 

BNB/USD daily chart

BNB/USD daily chart

A rule of thumb in central banks and global markets is that central banks often try to push through their monetary policy with as less possible market shock. That would mean that instead of triggering the release of the yield curve control, the BoJ further communicates and reveals what it wants to do so that the markets can start pricing at a slow pace at the turn of events that are bound to happen. Expect a small step back towards $292.10 at the monthly R1 one support before jumping higher against $336.50 near the monthly R2 resistance level.

Author

Filip Lagaart

Filip Lagaart is a former sales/trader with over 15 years of financial markets expertise under its belt.

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