Binance Coin [BNB] bears stay undeterred, will the coin succumb or resist?
- Traders kept their faith in shorting BNB.
- The coin’s trajectory could remain in consolidation for the time being.
The growth of Binance Coin [BNB] in the last 30 days has been minimal, registering a 4.07% uptick within the period. But this could be a sign of strength, especially as the broader market has had to deal with a period that was quite opposite to the performance of the first quarter.
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Despite that, a large number of traders seem to be confident in a further BNB decrease, based on the funding rate. According to Santiment, funding rate in perpetual futures contracts tied to the coin has been negative since 21 April.
Eliminating the overconfident
When the funding rate is negative, it means that shorts were willing to pay longs in order to keep the bearish position open. The opposite happens when the funding rate is positive.
Source: Santiment
At press time, the BNB’s funding rate was -0.007. This implied that bearish sentiment uncoiled from the highs of the previous weeks. Still, traders who expect the underlying asset price to drop outweighed those with a more optimistic view.
However, the expectations of these traders were caught in between reality and fantasy. Notably, short contracts were the most liquidated on 30 April. But since then, such a large wipeout has not occurred.
According to Coinglass, liquidations went up to $330,000 in the last 24 hours. Although shorts suffered most on 5 May, longs have taken over as of this writing. If sustained, then bearish expectations might be met.
Source: Coinglass
But will BNB succumb to traders’ projections as per its price action? Based on the daily chart, the Direction Movement Index (DMI) suggested possible consolidation in the short term.
Open options in red
At press time, the +DMI (green) was 21.87 while the -DMI (red) was 14.03. This means that buyers have some sort of control over sellers. However, the Average Directional Index (ADX) was 22.56.
The ADX (yellow), positioned below 25, indicated that there was no solid strength behind the positive direction. In a case where the indicator was above the aforementioned value, then it could set the pace for an upward trend.
The Awesome Oscillator (AO) further indicated that both bullish and bearish forces were in a contest to drive the coin’s momentum.
Nonetheless, there were some signs of a bearish twin peak. This occurs when there are two peaks made of green bars and another set of red bars follows.
Source: TradingView
Read Binance Coin’s [BNB] Price Prediction 2023-2024
Once again, BNB showed how it has established its strength. On 5 May, the U.S. Department of Justice (DOJ) security arm mentioned that it was investigating the exchange.
Typically, developments like this affect assets negatively. But according to CoinMarketCap, the price, at $324, did not fluctuate much since the public notification.
