BNB is adjusting to $700 due to high liquidity.
Will weak sentiment and indifference from whales push it down?
Binance [BNB] has cooled off after surpassing $800 in December.
Currently, the altcoin has dropped to $700, indicating increased profit-taking after reaching a record high of $793.
But will this altcoin be able to defend the $700 level ahead of the Fed's interest rate decision this week?
Price prediction for BNB: Will the $700 level hold?
Since November, BNB's price action has traced out an upward channel. Two price adjustments in the past near the 50-hour moving average (yellow EMA) have slid down to the channel's low.
In recent days, the price of BNB has been fluctuating around the moving average and the midpoint.
A drop below $700 could occur if the moving average is broken as a support level. Additionally, demand has weakened, as illustrated by the dismal RSI index.
Currently, price momentum is also weakening as illustrated by the ADX (Average Directional Index) retreating, indicating that BNB could slide down to $700 or lower.
Whales are reducing their exposure to BNB.
Source: Hyblock
Whales have added small positions while the price peaked in early December, with small green bars of Whale vs. Retail Delta.
However, recently they have cut back their positions, coinciding with the adjustment to the $700 level.
Not only whales, the entire futures market is also showing limited demand as Open Interest (OI) has dropped nearly 50%, from $800 million to $433 million. This implies a short-term bearish sentiment.
But will weak sentiment and demand push BNB below $700?
According to Coinglass's weekly liquidation map, the upper liquidity levels (shorts) are at $734 and $750.
Source: Coinglass
In contrast, longs using leverage are concentrated at $690. A liquidity hunt for longs could cause BNB to drop below $700 before targeting the upper liquidity at $734.
In conclusion, the dismal demand for BNB from whales and weak sentiment could accelerate the decline below $700. However, liquidity at $734 and $750 could become attractive if market sentiment improves.
