Disclaimer: The following analysis is the author’s own opinion and should not be considered investment advice
- Daily Structures Very Bearish After Rejection At $360
- $280 and $260 are levels to watch out for, but may be dangerous for bulls
Binance Coin plummeted to $260 on November 9th. A rally to $313 turned out to be a bearish retest, and we may see further declines in the exchange token in the coming days.
Read Binance Coin Price Prediction for 2022-23
24 hours before press time, 50.5% of participants were found to be in a bearish position. The futures market also showed sellers’ dominance. Long-term buyers should be careful, but traders on shorter time frames may enjoy the volatility.
Price Jumps At $260, But Bears Still In Control
Source: TradingView BNB/USDT
On the daily chart, Binance Coin performed well in October. The term ‘Uptober’ can be applied favorably later in the month as the price rose from a swing low of $256 to $360 on November 4th.
However, the situation has deteriorated significantly over the past week. The news surrounding the FTX exchange has shifted market sentiment to a very bearish position.
Binance Coin has seen high volatility in recent days. On November 8th, BNB swung from a high of $398 to a low of $298. Since then, the price has fallen below the range (yellow) where he traded from August to October.
BNB fell to $260 on November 9 when Bitcoin hit $15.8k. The outlook did not look positive in the coming weeks.
The higher timeframe market structure has been solidly bearish. In addition, the $300-$315 area has also been retested as resistance. OBV has seen a sharp plunge in the recent wave of selling. The RSI retested the neutral 50 as resistance when the BNB bear reversed his $300 towards the resistance.
Taken together, the outlook on the higher time frames was bearish. Still, hope and fear seemed to alternate with the market on an almost hourly basis, so some volatility was very likely on the lower timeframes.
The $280, $260 and $240 levels are likely to be tested again. Further south in the $210-$218 area, demand is also likely. Therefore, buying at any of these levels can involve a lot of risk.
Funding rate is negative, but open interest is falling sharply
Source: Coinglass
The funding rate has been very negative over the past few days, even as high as 0.1%. This indicates that futures market participants are very bearishly positioned.
The flip side of this observation was that a sudden spike in price could trigger a large number of liquidations and raise the liquidation cascade.
Source: Coinglass
The open interest chart also showed a decline in OI over the past week after a local top formed at $360. The bulls that fueled the previous rally have likely been pushed out of the market. A rise in the OI along with a drop in price over the next few days will indicate the strength of the bears.
Given the dangerous conditions for the market bulls, waiting patiently for this storm to unfold could come at a cost. It was unclear how long it would take. Binance Coin could quickly fall below the substantive support level again as Bitcoin shows weakness below his $18,000 level.
