BNB fiercely defends $220 amidst strong regulatory wave
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The D1 chart was bearish at the time of writing.
- Open interest rates improved; funding rates were negative.
The US SEC lawsuits against Binance and Coinbase have capped any likely upside on the crypto market. The regulatory pressure saw Bitcoin [BTC] retest its two-month lows at $24k, decoupling from S&P 500. Binance Coin [BNB], the native Binance ecosystem token, sustained more hits but eased at $220.
Read Binance Coin [BNB] Price Prediction 2023-24
According to a recent report, the Binance exchange reportedly faces another investigation by French authorities for illegal operation and money laundering. Besides, the exchange ditched the Netherlands after failing to secure an operating license.
Despite these developments and the ongoing FUD, BNB didn’t drop below $220 as of press time.
Will the $220 support prevent further drop?
A Fibonacci retracement tool was placed based on Q2 2023 price action (swing high in mid-April and low in June). Based on the tool, the 23.6% Fib level ($250.8) and $265 – 38.2% Fib level ($269.8) are key obstacles to BNB’s upside.
A price rejection at these roadblocks could see BNB retrace and retest the $220 support. Notably, the support prevented a further drop in December 2022 and aligned with a bullish order block (OB) of $205 – $243 (cyan), formed on the weekly chart on 27 June 2022.
A breach of the above strong bullish stronghold could expose BNB to an aggressive sell-off, with $200 and $184 as the immediate lower support levels.
In the meantime, the RSI (Relative Strength Index) attempted to climb off the oversold zone, but the OBV dipped to December 2022 lows. It shows mild buying pressure amidst a muted overall demand.
OI improved; funding rates in red
Interestingly, BNB’s open interest (OI) rates have steadily improved since 5 January, when US SEC filed a lawsuit against Binance. The OI has jumped from $316 million on 5 June to $385 million at the time of writing. It highlights increased open contracts for BNB in the futures market – a perceived bullish sentiment.
How much are 1,10,100 BNBs worth today?
But the volume-weighted funding rate was still negative, painting a bearish grip on the asset. The conflicting metrics emphasize the uncertainty BNB is facing amidst regulatory pressure.