BNB Reached Near Overbought Zone; Is a price reversal likely?

Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and is the opinion of the author only.

  • BNB has reached the overbought area, with the possibility of a trend reversal.
  • The altcoin could drop to $254.3 or $251.6.
  • A break above $263.7 will invalidate the bearish expectations.

Binance coin (BNB) R&D was met strongly in mid-December which sent the price down from around $270 to a new low of $220. But the bulls found strong support at $231.2 and were able to make a successful recovery.

However, the price recovery did not last long Bitcoins (BTC) The side structure has pushed the altcoin market, including BNB, into a trading range.

BNB has been trading between $240 and $251.6 since December 18th. It only broke above this range on January 4, 2023, after BTC posted a bullish run on the same day.

At press time, BTC’s bullish momentum has waned and BNB is trading at $257.1. The price was blinking red, indicating that a correction might be imminent.

Read BNB price forecast 2023-24

BNB Flashes Red: Is a Price Decline Possible?

Source: BNB/USDT on TradingView

The 12-hour chart was flickering red at the time of publication, and technical indicators are pointing to a possible trend reversal.

The Relative Strength Index (RSI) turned down around the 70 mark (overbought territory). This indicates that the buying pressure has peaked and is slowly declining.

The Money Flow Index (MFI) is also down near the 70 mark (also overbought). This showed that the accumulation had reached a peak and a small distribution occurred.

If the bears rebound, BNB may have to correct the price which could reach the 50-period Exponential Moving Average (Exponential Moving Average) at $254.3. If the selling pressure intensifies along with the bearish BTC, BNB could drop to $251.6.

These levels can act as a short stop target with a stop loss above $263.7.

However, a move above $263.7 would invalidate the bearish bias shown above. Such a rally will only boost the bulls if they clear the barrier at the 50% Fibonacci level at $268.9.

How do You can get many BNBs for $1?

BNB has seen a slight decrease in volume after the recent price increase

Source: feeling

BNB has seen a drop in trading volume after the recent price rally peaked. This could undermine the buying pressure and push BNB lower.

Source: feeling

On the supply side, the selling pressure observed at the time of publication has come mainly from coin holders (10k-100k). However, the aforementioned category represents only 3% of the supply.

The provider category with more than 23% (1M – 10M coins) has become inactive since December 21st.

The next influential and active resource was the (10M – 100M) category, which has more than 57% of the total supply. They had gathered between January 3 and 4 but stopped working on January 5.

The behavior of the above passive options classes can cause investors to exit their positions, so it is worth tracking their movements.

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