BNB on the verge of breaking out past $250? Here’s the counter argument
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Price action showed signs of bullishness, but $265 was a critical resistance.
- The presence of buying pressure over the past month might not be enough to fuel a rally.
Binance Coin [BNB] has been on the path to recovery since late June. Buyers were able to defend the $230 level and forced BNB to form higher lows thereafter. Yet each foray past the $250 mark was met with rejection.
How much are 1,10, 100 BNBs worth today?
This showed bulls were not yet strong enough to breach the resistance. It also highlighted bears weakening their grip on $250 after each attempt by the buyers. Can they force a breakout soon?
The price structure is bullish but that doesn’t warrant buying the token yetSwing traders and positional traders have their focus on the daily or higher timeframe charts. For such traders and even long-term investors, Binance Coin does not yet offer an attractive buying opportunity.
However, strong losses in June meant long-term bias remained bearish. Yet the move past a lower high at $252.8 on 22 June, although brief, highlighted bullish intent. Moreover, the price formed a series of higher lows since then, highlighted by rising trendline support.
The contraction in price action was accompanied by a rising OBV, which showed steady buying pressure. The RSI hovered near the neutral 50 mark for most of July, showing there was a lack of heavy momentum in either direction.
The mean coin age uptrend showed that BNB was accumulated on-chainAs an exchange token, BNB offers trading fee discounts on the Binance exchange. This means users of the platform have an incentive to hold the token, which can go some way in explaining the rising mean coin age of the token.
It was also a sign that buyers could be accumulating it, anticipating a bullish breakout. The MVRV ratio showed a severely undervalued asset, once again reinforcing the bullish bias.
Realistic or not, here’s BNB’s market cap in BTC’s terms
Coinglass data showed that the Open Interest behind the token ticked higher in July. Even though prices did not have a strong uptrend, the climbing OI signaled bullish sentiment in the market.
The $252 and $265 levels are places where a bearish reversal could occur. Yet, if the bulls can gather their strength and push past $265, a retest of the same level would present a long-term buying opportunity.