Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author

Market structure on daily and lower timeframes was bearish A $220 bounce was underway but met with resistance at $240

There has been a lot of fear surrounding Binance in recent weeks, following the implosion of FTX. These fears were clearly visible on the price charts of the exchange token Binance Coin [BNB].

Furthermore, CryptoQuant’s recent report on Binance’s Proof-of-Reserve highlighted that their liabilities were 97% covered by the exchange reserves.

Read Binance Coins [BNB] Price forecast 2023-2024

This data suggested that Binance was not exhibiting FTX-like behavior. Their report was more to establish that Binance did indeed hold the amount of BTC they claimed to have, and not to foster positive sentiment about the exchange.

Binance Coin Crashes Below USD 250, Bulls Skirmish To Reclaim USD 240

Source: BNB/USDT on TradingView

The price charts have been wildly skewed in favor of the bears over the past week. In late November, BNB rose to test the $315 resistance level and was rejected. Until Dec. 11, the price started a gradual downtrend, which seemed more like a pullback before another push.

However, this idea was quickly debunked as Binance Coin dipped below the $276 support level. It tested the same as resistance on Dec. 14. The area highlighted in red above represented a bullish order block on the 12-hour chart.

During the drop, the area delivered one positive reaction, forcing a jump to $276. However, the downtrend was too strong and this bullish order block turned into a bearish breaker.

A retest of this breaker could provide short opportunities, targeting the $216 level that served as support in July. Invalidating this bearish idea would be a step back above USD 260 and the marked breaker.

The average coin age is rising, but the funding rate plummeted to show bearish sentiment

Source: Sentiment

Due to the sharply decreasing funding ratio, short selling became an overflowing trade. While this showed strong bearish momentum from futures traders, it also meant that an upward move could force these shorts to close at a long and fuel further rallies.

Such a move to the $250 area, if realized, could be used by the bears. However, the average coin age of 90 days has been on a steady upward trend since late November.

This suggested that BNB tokens were not seeing increased activity on the chain, which normally happened alongside intense sales. On the social front, weighted sentiment was negative last week. Social dominance also shot north at 10.8% earlier this month, but has since fallen.

Source: Coinalyse

The open interest measure has risen sharply since December 12. This was the day BNB fell from the $290 mark, showing that short positions were likely opened. Thus, the selling pressure in the futures market was emphasized.

The rise in OI, alongside falling prices, again underlined the strong bearish sentiment behind BNB.





This post Binance Coin’s bearish structure allows short sellers to re-enter here

was published first on https://ambcrypto.com/with-binance-coins-bearish-structure-here-is-where-short-sellers-can-re-enter/

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