Every man for himself on Binance's BNB: August 23, 2023 analysis

While the Binance platform is facing numerous difficulties, the BNB price has not remained unaffected. Let’s take a look at the prospects ahead for the leading exchange cryptocurrency.

Current BNB situation

Since June, the BNB price has stabilized in a range roughly between $230 and $250. It was only last week that BNB broke out of this range, recording a drop of over 10%. The BNB is now trading just above $200. It is below the daily 50 and 200 moving averages, both of which are pointing and crossing downwards. From a chartist’s point of view, we can see a potentially activated double top. This figure promises a move to the south. The oscillators indicate a bearish momentum, although a slight bullish divergence suggests a hint of hope.

The current technical analysis was produced in collaboration with Elie FT, investor and trader with a passion for the cryptocurrency market. Now a trainer at Family Trading, a community of thousands of own-account traders active since 2017. Here you’ll find lives streams, educational content and mutual support around the financial markets in a warm, professional atmosphere.

Derivatives panic?

According to Coinalyze, BNB’s open interest has been revised upwards. At a time when the cryptocurrency’s price is trending downwards, this may suggest an increase in short positions on the latter. Whether in anticipation of a downtrend or as a hedging strategy, these positions can accentuate the selling pressure on BNB. The cryptocurrency’s pessimism can be illustrated by its negative funding rate. Indeed, the latter clearly shows the selling pressure on BNB contracts, which are worth less than the underlying asset. Paradoxically, however, this can represent a buying opportunity. After all, who wouldn’t want to be remunerated for holding a long position in a potentially attractively priced asset? Despite this, the fundamentals surrounding NBB do not allow us to be so confident.

BNB price scenarios

Should the BNB price return above $220 resistance, we could anticipate a continuation up to $270. However, watch out for the $230-250 zone. The next resistance to consider, at this stage, will be the psychological threshold of $300.

If the NBB fails to re-enter and hold the $220 level, we might consider testing support at $183. Unfortunately, if this level doesn’t hold, the BNB price could attack the $150-$140 zone more or less quickly.

Conclusion

BNB is facing a number of negative factors which have legitimately led to a fall in its share price. It is gradually approaching its lows, starting from its ATH. We must hope for renewed confidence and a genuine return of buyers, so as not to envisage the worst. It will be important to keep a close eye on the price’s reaction at the various identifiable levels, in order to confirm or refute the various hypotheses made. Beware of potential fake outs and market squeezes on each of these situations. And remember that these scenarios are based solely on technical analysis. Cryptocurrency prices may evolve more or less rapidly, depending on other, more fundamental factors.