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BNB broke below the $594 support level, as the entire crypto market continued to experience a post-halving price correction. Following the Bitcoin halving on 20 April, the crypto market hasn’t reacted positively yet with BTC dipping to $62k and most altcoins registering price drops.
Earlier in April, Binance's BNB pumped by over 20% but hit a price wall at $618 resistance level. Coupled with the bearish sentiment in the market, BNB dipped by 5% with the $594 support providing immediate support.
However, the continuation of the selling pressure saw BNB break the $594 support level over the past 12 hours with an opportunity for sellers to register more gains.
Blockhead
Sellers Look to Maximize Bearish Sentiment
The key indicators for BNB were fully bearish on the lower timeframes. On the four-hour timeframe, the Relative Strength Index (RSI) stood at 37, highlighting the increasing selling pressure which could potentially reach the oversold region.
Similarly, the Chaikin Money Flow (CMF) was negative with a reading of -0.26. This signaled a significant outflow of capital from BNB with holders either conserving their capital in stables or taking profit.
The break of the support level offers new short opportunities. An entry from the current market price of $585 will yield profits of between 7% - 10% at the $525 to $550 price zone.
However, it is vital to note that this bearish thesis could easily be invalidated if Binance launches a new token on its launchpad. Typically, token launches on the Binance Launchpad drive up demand for BNB, as participants are required to hold a significant amount of BNB to receive a good share of the new token.
This has proven effective in the past with BNB experiencing swift price rises after announcing a new launchpad subscription. Thus, intraday traders should approach the BNB short trade with a near-term mindset, due to the possibility for volatility.
Disclaimer: This article does not constitute trading, investment, financial, or other types of advice. It is solely the writer’s opinion. Please conduct your due diligence before making any trading or investment decisions.
