Recent developments surrounding Binance Coin [BNB], the fourth-largest cryptocurrency by market capitalization, have brought about some unease among investors. The release of former Binance CEO, CZ, after a four-month detention related to U.S. money laundering allegations, has caused a stir in the market, particularly impacting BNB’s price.
Following CZ’s release, there was a surge in Binance Coin, accompanied by an increase in liquidations that led to an immediate local reversal in most BNB pairs, prompting concerns about a potential correction before a further climb in the fourth quarter, a traditionally bullish period for the crypto market.
Recent Uptrend in BNB Price
Over the past three weeks, the BNB/USDT pair has shown a strong uptrend, marked by consistently higher highs and higher lows. This upward trajectory is clearly visible on the 4-hour chart, offering insights into both short-term and long-term price movements.
At a recent peak of $620, BNB signaled a potential pause in its uptrend, possibly indicating an upcoming correction. The formation of a double top pattern at the $620 level hints at a potential retracement, which could be confirmed if the price breaches the neckline of the double top formation.
If such a break occurs, BNB may correct down to around $560, or even dip as low as $540, a level that aligns with the 0.382 Fibonacci Retracement level, often serving as a support level during healthy price trends like the current one.
Considering the optimistic outlook for the crypto market in the fourth quarter, a pullback to the $560 mark could present an attractive buying opportunity, with BNB potentially aiming for $800, offering a potential return on investment of 40%.
Analysis of Net Longs, Shorts Delta, and Open Interests
In addition to price action, various metrics like net longs shorts delta, open interest, and whale vs. retail delta point towards a probable correction. These indicators, which peaked at 100%, have now decreased to a global average of approximately 82%.
The net longs shorts delta for BNB, reflecting the balance between buyers and sellers, has declined from its peak to 86%, indicating a waning momentum among buyers.
Simultaneously, open interest has fallen to 89%, lending further support to the possibility of an impending correction.
The whale vs. retail delta, illustrating the buying activity of large holders compared to retail traders, has exhibited a noticeable drop, with whale dominance over retail traders decreasing by almost 40% in the last three months.
This decline suggests reduced activity from whales, often signaling a forthcoming market retreat. Observations of BNB’s recent price actions and market metrics suggest that a correction could be on the horizon.
Nevertheless, given the robust uptrend, the $560 level could serve as an opportune entry point for traders. If BNB manages to bounce back from this level, there is a likelihood of the coin surging higher, potentially reaching $800.