Cryptocurrency

Why is the BNB price up today?

The price of BNB (BNB) is up around 3% today, in part due to bearish traders opening more BNB-tied contracts despite suffering losses via liquidations in the past 24 hours. In addition, BNB stands extremely “oversold,” which may have prompted traders to buy the dip.

BNB price bounces after being “oversold” 

On June 14, BNB price climbed nearly 4% to $253. The gains came as a part of a recovery that saw its price rebounding 12% two days after falling to a six-month low of $220.

From a technical perspective, BNB’s rise on June 14 came on the heels of its “oversold” status. Notably, the daily relative strength index (RSI) dropped to around 16.6 two days ago, its lowest reading since March 2020.

An RSI reading below 30 typically precedes a consolidation or recovery period in the market.

For instance, the BNB’s daily RSI stint below 30 in December 2022 preceded a 50% price rally in the next two months.

BNB funding rate flips negative

The funding rate of BNB slipped below zero on June 10 and has been negative since. In other words, bearish traders are willing to pay bullish traders to keep their short bets open.

Meanwhile, BNB open interest has reached a one-month high of around $377 million, coinciding with an overall downtrend. All these metrics suggest that most traders are betting on more downside, which often results in price rebounds that can extend if short position get liquidated

Key BNB price level to watch

BNB’s price rebound also comes after a steep 25% decline last week, prompted by the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Binance, which named BNB as an “unregistered security.”

Related: SEC and Binance.US to negotiate deal avoiding total asset freeze

In recent years, BNB price came under pressure due to broader crypto market declines, as shown below.

Each time, BNB price discovered strong support near $220, which the bulls will argue should make this level an ideal buy-zone after the SEC-led price drop — if history repeats.

As of June 14, BNB/USD trades inside $240-250 range, a consolidation area from December 2022-January 2023.

If the price decisively closes above the $250 resistance, then the primary upside target will be its 50-day exponential moving average (50-day EMA; the red wave) near $300 in Q3, up around 20% from current prices.

Conversely, a close below $240 would risk crashing price toward $220. If the selloff continues, the next downside target to watch is likely in the $180-205 area.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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