The price of BNB is up around 3% today, and bearish traders seemingly cannot resist opening more BNB-tied contracts despite facing losses via liquidations in the past 24 hours. BNB appears to be extremely “oversold,” which may have prompted traders to buy the dip.
On June 14, BNB price climbed nearly 4% to $253 – a recovery worth noting since its price bounced back 12% after plummeting to a six-month low of $220. From a technical standpoint, BNB’s rise owes much to its “oversold” status. The daily relative strength index (RSI) dropped to around 16.6 two days ago – its lowest reading since March 2020. An RSI reading below 30 typically precedes a consolidation or recovery period in the market.
The funding rate of BNB slipped below zero on June 10 and has remained negative. This proves bearish traders are willing to pay bullish traders to keep their short bets open. Meanwhile, BNB open interest has reached a one-month high of around $377 million, coinciding with an overall downtrend. Most traders are betting on more downside, which often results in price rebounds that can extend if short positions are liquidated.
The recent BNB price rebound comes after a steep 25% decline last week, prompted by the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Binance, which named BNB as an “unregistered security.” Each time the BNB price has been under pressure due to broader crypto market declines, it seems to find strong support near $220. Bulls will argue this provides an ideal buy-zone after the SEC-led price drop, should history repeat itself.
As of June 14, BNB/USD trades inside the $240-250 range, a consolidation area from December 2022-January 2023. If the price decisively closes above the $250 resistance, then the primary upside target will be its 50-day exponential moving average (50-day EMA; the red wave) near $300 in Q3 – approximately a 20% increase from current prices. Conversely, a close below $240 would risk a price crash toward $220. If the selloff persists, the next downside target to watch would likely fall in the $180-205 area.
Source: Cointelegraph
