Binance Coin [BNB] emerged as the top performer among the ten largest cryptocurrencies by market capitalization, experiencing a surge of over 5% within the past 24 hours.
At the time of this writing, BNB was trading at $533, marking a significant leap from its 24-hour low of $503. Despite this upward momentum, there were concerns that BNB could face a bearish reversal if the positive trend in the broader market faltered.
Can BNB Sustain its Bullish Momentum?
BNB’s price movement has been closely following that of Bitcoin [BTC], with the token’s ability to retain its gains dependent on the overall market sentiment.
An analysis of BNB’s daily chart indicated a potential bearish divergence. While the price exhibited an upward trajectory, technical indicators suggested a weakening uptrend following the formation of a double-top pattern on the daily chart.
In late July, BNB reached its first peak as the price surged from below $500 to challenge a crucial resistance level at $600, followed by a downward trend that established a neckline at $464.
After another attempt to surpass $600, the uptrend was interrupted. A decisive bearish breakout would occur if BNB drops below $464, but this bearish scenario could be invalidated if the current upward trend persists and BNB breaks through the resistance level set by the second peak.
The Relative Strength Index, standing at 47, indicated that sellers still maintained control despite the price gains. For a confirmation of bullish momentum and the negation of the double-top pattern, the RSI line needed to cross above the signal line.
Furthermore, the Directional Movement Index (DMI) suggested a weakening uptrend, with the positive DI (blue) remaining below the negative DI (orange), signaling a potential bearish shift.
Notably, data from Hyblock Capital pointed to a concentration of liquidations around $548, making it a formidable resistance level where traders might opt to capitalize on profits as BNB nears $548 to minimize losses.
Declining Usage on BNB Chain
The BNB Chain has witnessed diminishing activity, which could impede BNB’s rally prospects.
DappRadar data revealed a 25% decrease in the number of unique active wallets on the network over the past week. Additionally, trading volumes plunged by over 30%, dropping from approximately $850M to $350M.
This dwindling network engagement might signify waning market interest in BNB.
Coinglass data indicated predominantly negative Funding Rates for BNB over the last month, reflecting a prevailing bearish sentiment among traders.