Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- The lower timeframe bias was strongly bearish.
- The pattern breakout showed that BNB was likely to drop to USD 300.
Bitcoin [BTC] fell below the $27.8k support level and has retested it as resistance for the past two days. This was accompanied by Binance Coin [BNB] prices are diving on the price charts, with further losses expected.
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The bearish breakout below the triangle pattern meant that Binance Coin traders can anticipate further losses in the coming days. The $300 psychologically important level could be tested as support.
Failure of trendline support indicated downward movement
Source: BNB/USDT on TradingView
Since rising to $350 in mid-April, Binance Coin has been fluctuating between the $320 and $340 areas. Over the past three weeks of trading, BNB has shown it has formed a symmetrical triangle pattern (yellow). Over the past few days, the lower trendline support has been broken and retested by price.
This showed bears had the upper hand, and it was followed by a rapid drop from $324 to $311. The move represented a 4.39% loss in 32 hours. In the south, the $309 and $301 support levels have been important since February.
The RSI was below the neutral 50 and showed strong downward momentum. Meanwhile, OBV fell in May, underlining that sellers had a slight edge over buyers.
On higher time frames, the $300-$315 region has been a strong demand zone. Therefore, short sellers should be wary of sudden short-term rallies. A rising OBV could alert BNB traders to an impending bounce.
The Open Interest chart showed discouraged bulls
Source: Coin analysis
On May 8, outstanding interest rose nearly $6 million. During that time, Binance Coin fell from $324 to $316, showing that speculators were shorting the asset in large numbers.
Realistic or not, here is the BNB market cap in terms of BTC
This reinforced the idea that the collapse below the triangle was fueling bearish momentum. Mint glass Liquidation Data showed that Binance Coin saw a large number of long positions liquidate on May 8.
Over the past two days, open interest has been flat as prices continue to fall. The trading session in the two hours before the time of writing saw rising OI alongside falling prices again. Hence, bears are likely to push prices towards $308 and $301 this week.