After retesting the support level.
Binance Coin finds support around the previously broken descending trend line, pointing to a rally.
On-chain data paints a bullish picture as BNB’s OI-weighted funding rate is positive and the long-short ratio is above one.
A daily candlestick close below $468.70 would invalidate the bullish thesis.
Binance Coin (BNB) is retesting its previously broken trendline on Sunday and is up 2.73% on Monday. As of writing during the Asian session on Tuesday, it continues to trade higher. On-chain data supports BNB’s bullish price action as the long-short ratio is above one and its funding rate is positive.
Binance Coin Price retested and found support on Sunday at the previously broken descending trend line (drawn connecting multiple highs since June 6). The next day, it surged by 2.73%. As of Tuesday, it continues to trade up 1.5% at 534.70.
The Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the daily chart are on the verge of breaking above their neutral levels of 50 and zero, respectively. If the bulls are indeed making a comeback, then both momentum indicators should maintain their positions above their respective neutral levels. Such a development would add a tailwind to the recovery rally.
Coinglass’ OI-weighted funding rate data is an important metric for traders and analysts to gauge market sentiment and predict future price movements. This index is based on the yields of futures contracts, which are weighted by their open interest rates. Generally, a positive rate (longs pay shorts) indicates bullish sentiment as long positions pay for shorts. Conversely, negative numbers (shorts pay longs) indicate bearish sentiment, with shorts paying at the expense of longs.
In the case of BNB, the metric stands at 0.0023%, reflecting a positive rate, indicating that longs are paying shorts. This scenario often signifies a bullish sentiment in the market, suggesting a possible upward movement in the Binance Coin price.
Coinglass’ BNB long-short ratio also stands at 1.31, supporting the bullish outlook. This ratio reflects bullish sentiment in the market, as the number above one suggests that more traders anticipate the asset’s price to rise.
While on-chain metrics and technical analysis support the bullish outlook, if Binance Coin closes with a daily candlestick below $468.70, the bullish thesis would be invalidated by creating a lower low on the daily chart. This development could see BNB drop 14% to retest its Aug. 5 low of $400.
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