BNB is currently testing one of its most significant levels on its chart and on this occasion support looks considerably less resilient. At the time of writing, the binance native coin was trading around $594.66 and carried $1.86 billion in 24-hour volume as it pulled back into the same demand zone that had failed sell-offs since February.
It is the state in which price is within this zone, which essentially sets this test apart. Previous arrivals had occurred from sudden liquidations and rapid rebounds. This one originates due to a broken breakout, loss of momentum, and a market structure that over time has gradually tipped in favor of sellers.
All the market participants are attempting to focus on the HTF in order to monitor what actually happened to the price structure. The price of BNB has decreased significantly since the February highs, and then the asset proceeded on to trade sideways in the approximate range of $590 and $690 for about 4 months. The range that BNB has formed was quite noteworthy. The lows were held on several occasions, which turned into one of the cleanest support levels we could have observed so far. For the bounces, it became progressively weaker. The peaks kept rising earlier and supply in the upper range was consistently facing the supply kicking in the market.
The imbalance scenario for BNB was almost there
The asset’s price started to work closer to the range highs and at one point tried to break above, touching the upper boundary of the $700 area prior to swiftly pulling back and eventually matching up with very heavy selling. As of now, BNB has been trending downwards towards the support level and has already surrendered the highs.
Late buyers being trapped in a flopped breakout can weaken a market, leaving it exposed to weakness. Those who rushed in hoping for continued upward momentum now have losers on their books. In the case when the price bounces back, they are probably going to sell strength, take their breakeven, and add more overhead resistance. The rapid selloff from the highs indicates that the current market scenario might be indicating new market conditions.
Trend indicators is not leaning on the bearish picture
Currently the BNB is trading just below every key moving average. The 7-day SMA is standing at 662.14, the 30-day SMA at 656.55 and the 200-day SMA at 729.41. The exponential moving averages point to the same idea, as each of the 7-day EMA at 645.57 and the 30-day EMA at 651.40 lies slightly below the 200-day EMA at 702.54.
The gap between price and those averages is also crucial and needs attention here. Market prices tend to vary from moving averages, but on the other side, in choppy market conditions, an asset trading below the short, mid, and long-term trend indicators is nearly always a sign of general weakness.
Momentum indicators indicate that the sellers has completed their job
The MACD indicator is showing a bearish trend. The MACD line at -0.31 is substantially below the signal line of 5.55 and the histogram at -5.87 reflects selling momentum. The RSI indicates that values are getting nearly to oversold, as the 7-day RSI is at 29.97, the 14-day RSI is at 37.90 and the 21-day RSI is at 41.43. The scenario indicates that selling pressure is more on the overextended side, but oversold conditions solely do not indicate the reversal if the strong side of selling holds.
Most important thing to focus on here is that these momentum signals are eventually taking place at a critical support level but the rebound is still lacking. Fibonacci analysis also backs up the bearish outlook, with BNB already losing the vital 61.8 percent ($647.68) and 78.6 percent ($621.67) retracements. Upon losing these stated levels, these values are likely to turn into resistance, raising the probability of further drawdown.
