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- The BNB jumped more than 5%, but technical indicators suggested a possible bearish divergence.
- Transaction volumes on the BNB chain have dropped by more than 33% in the past week, indicating a decline in network activity.
Binance Coin (BNB) was the biggest gainer among the ten largest cryptocurrencies by market cap, after surging more than 5% in the past 24 hours.
At the time of writing, BNB was trading at $533, a significant increase from the 24-hour low of $503. Despite these gains, the BNB was at risk of a bearish reversal if the bullish trend across the broader market failed to hold.
Will the BNB’s bullish momentum continue?
The price of BNB reflects that of Bitcoin (BTC). Therefore, the likelihood of this token maintaining its gains depends on whether the overall market sentiment remains positive.
The BNB daily chart showed a possible bearish divergence. While the price gained momentum, technical indicators suggested that the uptrend remained weak after BNB formed a double top pattern on the daily chart.
BNB made its first high in late July after the price rose from below $500 to $600 to test a key resistance. A downtrend then followed to form a neckline at $464.
The uptrend resumed before collapsing again after hitting $600.
BNB will confirm a bearish breakout if it falls below $464. However, this bearish thesis will be invalidated if the current uptrend continues and BNB breaks the resistance above the second peak.
Source: TradingView
The Relative Strength Index at 47 showed that despite the gains, sellers remained in control. The RSI line needed to cross above the signal line to confirm the bullish momentum and invalidate the double top pattern.
The Directional Movement Index (DMI) is another key indicator that showed a weakening of the uptrend. The positive DI (blue) remained below the negative DI (orange), which indicated a potential bearish reversal.
Data from Hyblock Capital showed a high concentration of liquidations at $548. Therefore, this level could act as an important resistance point if traders buying into the rally take profits once BNB approaches $548 to manage losses.
Source: Hyblock Capital
BNB channel sees drop in attendance
The BNB chain has also seen reduced usage, which could further hamper BNB’s ability to recover.
Data from DappRadar The survey results showed that over the past seven days, the number of unique wallets active on the network has dropped by 25%. Volumes have also dropped by more than 30%, from around $850 million to $350 million.
Read Binance Coin (BNB) Price Prediction for 2024-2025
This decline in network usage could show a decrease in market interest in BNB.
Data from Coinglass showed that BNB funding rates have been mostly negative over the past month, showing a general bearish sentiment among traders.
Source: Coinglass
