Will BNB bounce to this level before going short?
BNB's $220 level has not been tested in September, and previously served as support in June, marking it as an area of interest for bears.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Binance Coin had a bearish market structure on the 1-day and 4-hour price charts.
- Despite seller dominance in the market, a bounce toward $220 was a possibility.
Binance Coin [BNB] has a bearish outlook on the price charts after the recent retest of the $205 level as support. This was the second test of the $205 level in the past three weeks.
Read Binance Coin’s [BNB] Price Prediction 2023-24
The previous one occurred on 22 August and saw Binance Coin bounce higher in search of liquidity. Hence, despite being a lower timeframe structural break, it did not signal a bullish trend in progress. Could the same scenario materialize once more?
The $220 zone presented an attractive pocket of liquidity
At the time of writing, the market structure of Binance Coin was bearish. It has been bearish on the 4-hour chart since 31 August, after a previous higher low was broken. On 29 August, BNB saw a bounce that reached $234.
However, the red box at $225 highlighted an H4 bearish order block, a zone of resistance. BNB was able to climb higher, but unable to establish an uptrend. This suggested a northward liquidity hunt and could repeat in the coming days.
The $220 level has not been tested in September and was a level that previously served as support in June. Hence, it is likely that there are lots of sell orders in this zone. A deviation above $220 to fool enthusiastic bears and catch the early short sellers offside was a possibility.
On the other hand, a move below $205 would be a sign of significant bearish pressure. It would likely be followed by a drop to the next support level at $183.
The Open Interest chart noted a bearish conviction
Realistic or not, here’s BNB’s market cap in BTC’s terms
Since 10 September, the Open Interest has been rising. During this time, the price of Binance Coin fell from $214 to $204. Rising OI alongside falling prices indicated short sellers entered the market in large numbers, and was a sign of bearish conviction.
The spot CVD also saw a steep drop on 11 September and reflected heightened selling activity in the spot markets. Together, they showed market participants expect Binance Coin to remain bearish.
