Analysis
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
Source: BNB/USDT on TradingView
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
Source: Coinalyze
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.
