BNB Liquidation to Immediately Lead to Partial Reversal
Price movements and key indicators suggest that a pullback may be imminent.
Binance Coin (BNB), the fourth-largest cryptocurrency by market capitalization, has recently garnered attention following the release of former Binance CEO CZ after four months of detention on money laundering charges in the United States.
His release has triggered market movements for BNB. Following Binance’s surge, liquidation skyrocketed, resulting in an immediate partial reversal for most BNB trading pairs.
This raises the question of whether BNB will undergo a correction before climbing in the fourth quarter, which is typically a bullish period for the cryptocurrency market.
A closer examination of the BNB/USDT trading pair can provide some insights into potential price directions.
BNB Shows Continuous 3-Week Uptrend
BNB/USDT has been in a steady upward trend, consistently reaching higher highs and lower lows over the past three weeks. This trend is evident on the 4-hour chart, which provides a balanced view of short-term and long-term price movements.
Recently, BNB touched the $620 level, signaling a potential pause in the uptrend and the possibility of a pullback. The formation of a double top at the $620 level suggests a potential correction, which would be confirmed if the price breaks below the neckline of the double top.
If such a breakout occurs, BNB could correct to the $560 level or even as low as $540, representing a balance of price movements over the past three weeks on the 4-hour chart.
The $560 price level coincides with the 0.382 Fibonacci retracement level, which typically provides support in healthy trends like this.
Considering the overall bullish outlook for the cryptocurrency market in the fourth quarter, a retracement to $560 could present an ideal buying opportunity, with the potential for BNB to climb to $800, delivering a 40% return on investment.
Net Longs, Short Deltas, and Open Interest
In addition to BNB price movements, other indicators such as net long and short deltas, open interest, and whale and retail deltas also point to a potential correction. These indicators have reached peaks of 100% but have recently declined, currently averaging around 82%.
The BNB net long and short deltas, which track the balance between buyers and sellers, have decreased from their peak to 86%, indicating a weakening of buyer momentum.
Meanwhile, open interest has dropped to 89%, further supporting the possibility of a pullback.
The whale and retail delta, which tracks the buying behavior of large holders and retail traders, has seen a significant decline. Over the past three months, the dominance of whales over retail traders has decreased by nearly 40%.
This suggests that whales are becoming less active, which typically foreshadows a market downturn. Recent price movements for BNB and market indicators indicate that a correction may happen soon.
However, the strong uptrend suggests that the $560 level could provide traders with a good entry point. From there, BNB could potentially rise to $800.
