On June 5, the price of BNB (BNB) hit a record high of around $716 after rising 4.50% intraday and more than 14% in the last 24 hours. This allowed Binance’s native cryptocurrency to outperform the broader cryptocurrency market, which is up 3.5% in the last 24 hours.
There are no clear fundamental indicators supporting BNB’s price outperformance compared to the rest of the cryptocurrency market today. Instead, cryptocurrencies are drawing positive signals from macroeconomic and technical indicators.
BNB purchases increase as bond yields fall
The duration of BNB and the recent rally in the cryptocurrency market coincides with the decline in US bond yields.
For example, the US 10-year Treasury yield (US10Y) fell to 4.332% on June 4 from 4.63% five days earlier. During the same period, the price of BNB rose by more than 20.75%, showing a clear negative correlation with bond yields.
Treasury yields fell as the Federal Reserve’s preferred measure of inflation remained steady and weaker-than-expected data on manufacturing and consumer spending. It fell further on June 4 after reports of an unexpected decline in U.S. job vacancies.
Signs of slowing inflation have led bond traders to push the Fed’s first full 25 basis point rate cut forward from December to November.
When interest rates fall, the opportunity cost of holding safer investments such as cash and bonds decreases.
This has resulted in a growing preference for riskier assets such as cryptocurrencies and stocks, a sentiment that has helped propel BNB, today the fourth-largest cryptocurrency by market capitalization.
BNB has entered the ascending triangle breakout phase.
From a technical perspective, today’s BNB price rise signals a breakout phase of the current ascending triangle pattern triggered by the support confluence consisting of the 20-day (purple) and 50-day (red) exponential moving averages (EMAs).
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The opposite is true: an ascending triangle is formed when the price fluctuates between an upward trendline support and a horizontal trendline resistance. In an uptrend, the pattern is resolved after the price breaks the resistance line and rises by the maximum height of the triangle.
As of June 5, the price of BNB has broken above the triangle’s resistance line and is eyeing further upside towards an upside target of around $800, an increase of around 15% from the current price level.
On the other hand, BNB’s daily relative strength index (RSI) has entered overbought territory above 70, raising the possibility of a price correction or consolidation in June.
This coincides with the price testing the 1.618 Fibonacci retracement line as resistance, further advancing the outlook for a correction to the 1.00 Fib retracement line at around $630, down about 11.50% from current price levels in June.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.