The BNB price rose more than 3% on June 14, partly as bear traders opened more BNB-linked contracts despite suffering sell-off losses in the previous 24 hours. Also, BNB (BNB) is extremely “oversold”, which may have prompted traders to buy low.
BNB price bounces after being “oversold”
On June 14, the price of BNB rose nearly 4% to $253. The gains came as part of a rally in which the price rallied 12% two days after falling to a six-month low of USD 220.
From a technical perspective, the rise in BNB on June 14 came after its “oversold” status. Notably, the daily Relative Strength Index (RSI) fell to around 16.6 two days earlier, its lowest reading since March 2020.
An RSI reading below 30 usually precedes a period of consolidation or recovery in the market.
For example, BNB’s daily RSI period below 30 in December 2022 preceded a 50% price rally in the following two months.
BNB funding rate turns negative
The BNB funding rate fell below zero on June 10 and has been negative ever since. In other words, the bears are willing to pay the bulls to keep their short positions open.
Meanwhile, BNB open interest has reached a one-month high of about $377 million, coinciding with a general downtrend. All of these metrics suggest that most traders are betting on further declines, which often translates into price rallies that can be prolonged if short positions are liquidated.
Key BNB Price Level to Watch Closely
The BNB price rally also comes after a sharp 25% drop last week, sparked by the US Securities and Exchange Commission (SEC) lawsuit against Binance, which called BNB an “unregistered security.” “.
In recent years, the price of BNB has been pressured by declines in the broader cryptocurrency market, as shown below.
On all occasions, the BNB price found strong support near $220, which bulls say should make this level an ideal buy zone following the SEC-induced price crash, if history repeats itself. .
As of June 14, the BNB/USD pair is trading within the $240-$250 range, a consolidation zone from December 2022 to January 2023.
If the price closes decisively above the $250 resistance, then the main bullish target will be its 50-day exponential moving average (the red wave) near $300 in Q3, which would be around $300 higher. 20% off current prices.
Conversely, a close below $240 could send the pair lower towards $220. If the sell-off continues, the next downside target is likely to be in the $180-$205 area.
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