Breaking free from its extended trendline resistance, Binance Coin [BNB] achieved a new record peak at $794 on December 4th. This upsurge was driven by a prevailing bullish sentiment in the cryptocurrency market, particularly due to Bitcoin’s recent surge.
Currently, BNB is being traded at $715.86, consolidating in close proximity to its crucial support levels.
BNB’s Consolidation at Vital Support Level
Examining BNB’s price activity on the daily chart reveals a robust bullish stance as it sustained levels above the 20-day, 50-day, and 200-day EMAs. However, following its recent ATH breakthrough, the price action has been in consolidation mode over the past few days.
A conclusive dip below the $712 support level could potentially lead to a retreat towards the 50-day EMA at $663, which is expected to serve as a sturdy dynamic support barrier.
The Relative Strength Index (RSI) currently stands at 57, comfortably below the overbought territory. This indicates a possibility of further upside momentum if the broader market sentiment favors the bulls.
The $712 support level has now emerged as a critical short-term support. Should the bulls defend this level successfully, there could be a chance for retesting the $750–$760 resistance range. A close above this range might initiate a phase of price discovery for BNB.
Derivatives Outlook Points Towards Optimistic Sentiment
The derivatives market data for BNB indicates a growing interest among traders. Trading volume saw an increase of 70.85% to reach $1.7 billion, showcasing heightened activity following the recent uptrend. Open Interest also went up by 2.89% to $950.9 million, signaling the entry of new positions into the market. Notably, Options Open Interest surged by 62.49%.
Of particular interest is the long/short ratio, currently standing at 0.8882 over the last 24 hours, indicating a slightly cautious sentiment. However, Binance traders exhibit a significant level of optimism with a long/short ratio of 3.3085. Moreover, top traders are holding a strong long bias with a ratio of around 2.4.
The consolidation of BNB near the critical support suggests a potential opportunity for bulls to make a comeback. While market sentiment, especially Bitcoin’s performance, will be crucial, traders can monitor a rebound from the near-term EMAs as a signal of a sustained uptrend.
Before making any trading decisions, traders are advised to keep a close watch on Bitcoin’s momentum and monitor BNB’s price action at key levels.