Binance Coin bulls might be defeated in the coming days because…
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The bearish market structure of the past ten days was not yet broken.
- Failure to hold on to $300 would likely see BNB move another 8% downward.
Binance Coin formed a triangle pattern toward the end of April and threatened to break out upward. However, the failure of BNB buyers to defend the $320 support ten days ago showed the sellers were increasingly dominant.
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At the time of writing, the price seemed trapped within a range above a strong psychological support level. Yet, the formation of a range might not occur and BNB could be forced to plunge beneath $300 once more as Bitcoin also showed signs of bearish strength.
Fibonacci levels plot levels to watch out for around the $300 mark
The $315 and $300 levels of resistance and support respectively have been important on the lower timeframes. Over the past 48 hours, BNB has declined from the local highs at $316.3 to trade at $308.5, at the time of writing.
On the 6-hour chart, the RSI was unable to climb above neutral 50, showing the persistence of the bears. Over the past week, the trading volume was low as well. This came at a time when BNB retested the $300 level, which is both psychologically and technically important.
With Bitcoin facing rejection from beneath the $27.8k resistance on Monday as well, it appeared likely that more losses were in store for the crypto market this week. If Binance Coin were to slip beneath the $295-$300 area, the Fibonacci extension levels highlighted some key areas to watch out for.
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The 50% and 61.8% extension levels would likely be tested upon a move beneath $295, with the 23.6% level at $289 also expected to serve as minor support.
Meanwhile, a move above $316.3 would signify a break in the bearish market structure. Thereafter, buyers could begin to exert their will, but this was the less likely scenario.
Sentiment has been in bearish favor in May
Coinalyze data showed that despite Binance Coin’s rally from $300 on 12 May, the Open Interest did not budge. The OI began to decline after 12 May even when BNB prices rose, which suggested short positions were being closed.
The funding rate had been severely negative in late April and did not recover in May. This showed the majority of the market remained bearish. Combined with the bearish structure of the price action, further losses were likely for Binance Coin.