How BNB bulls can initiate a recovery after 10% price drop
- BNB could plunge below the $280 zone in the event of a liquidation cascade.
- If Bitcoin can regain the $40k mark, BNB bulls might be able to initiate a recovery.
Binance Coin [BNB] prices fell by 10.6% from the 21st of January to the 25th. Despite the downtrend, traders have reason to assess whether BNB is primed to recover the recent losses as it reached the lows of a one-month range.
The fall in prices was partially explained by the declining activity on the BNB network. A recent AMBCrypto report highlighted that the daily count of active wallets on dApps in the BNB network has trended downward since the 31st of December 2023.
The range lows served as support once more
The 12-hour chart of BNB highlighted a range (purple) that extended from $289 to $316. The mid-range was at 307, nestled within a resistance zone (red box) on the weekly chart.
Despite to surge to $338 in late December, the bulls were rebuffed firmly.
Since then, the price has struggled to climb past $320. The recent selling pressure flipped the momentum, with the RSI falling swiftly below the neutral 50 mark. On the other hand, the OBV did not slide downward as quickly.
This showed that selling volume was not overwhelming in recent days. This also meant that the bulls stand a chance to recover the recent losses.
The price action of the past month showed that the $288-$296 region has been a demand zone. Until this changes, we can expect prices to climb back above $300.
AMBCrypto analyzed the liquidation levels heatmap from Hyblock. The $287 level was tested on 25th January and had $600 million in estimated liquidation levels. The data showed that $280-$290 was a region of interest.
Another drop into this liquidity pocket could present a buying opportunity. However, the rest of the crypto market was bearish. Hence, bullish traders can exercise caution and reduce their position size accordingly when buying BNB.
How much are 1, 10, or 100 BNB worth today?
Bitcoin [BTC] was trading just below the $40.2k level, which had formerly been support. A rejection from $40k would see a sharp drop in BTC prices and BNB would likely follow. This could see the exchange token exchange hands at $280 or lower.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.