Binance Coin: Will the downtrend continue after a retest of $220
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Binance Coin has a bullish short-term market structure.
- The recent bounce could stall at the resistance levels overhead as market sentiment remained bearish.
Read Binance Coin’s [BNB] Price Prediction 2023-24
The higher timeframe charts showed Binance Coin was strongly bearish, although a move higher was possible. The lower timeframe price charts highlighted exactly where BNB could run into resistance that would force it to retrace recent gains.
The short-term price action showed the bounce could push to fill the imbalance overheadBinance Coin saw a strong bounce from the $205 support level in the past 24 hours. Measured from the local low at $203.4, BNB was up by 5.6%. Further short-term gains can be expected. The RSI managed to climb back above the neutral 50 mark on the 2-hour chart.
This showed bullish momentum on the lower timeframes. The market structure was bullish on the 2-hour chart after the recent lower high at $212.1 was breached. The OBV also noted a bounce and signaled that there was some demand in the market.
To the north, the range low at $220 was likely to act as resistance. There was also a fair value gap at $224 (white box) which had confluence with a resistance zone (red box) at $225. Therefore, a move to this region was likely, but BNB bulls could face rejection thereafter.
Further north, the $232-$240 was also a significant region based on last month’s price action.
The Open Interest showed speculator sentiment was shifting bearish once moreOn 21 and 22 August the Open Interest began to climb higher when the price fell, which showed intense bearish sentiment. The funding rate was negative, which hinted at short sellers being dominant.
Realistic or not, here’s BNB’s market cap in BTC’s terms
It was likely that short positions were being opened in large numbers as the OI began to decline when BNB bounced past $210.
Hence it was likely that short-sellers were closing their positions but bullish speculators were not yet confident enough to step forward in the futures market. In the spot market, the bounce was accompanied by a rise in the spot CVD which showed some buying pressure.