BNB breaks above 20-day EMA resistance at $524.50 but faces weakening buying pressure.
Chaikin Money Flow (CMF) indicates bearish divergence, suggesting potential price reversal.
Price could retest $524.50 support or potentially drop to $400 if bearish trend continues.
Binance Coin (BNB) finds itself at a critical juncture following a recent breakthrough above a significant resistance level formed by its 20-day exponential moving average (EMA).
Despite this apparent bullish move, underlying indicators suggest that the cryptocurrency may struggle to maintain its upward momentum, potentially leading to a retracement of recent gains.
Over the past week, BNB has experienced an 8% price surge, culminating in a breach of the 20-day EMA on Wednesday. This moving average, which had established a formidable resistance at $524.50 since August 26, typically serves as a key barrier during downtrends. BNB’s ability to overcome this level initially sparked optimism among investors.
However, a closer examination of technical indicators paints a more complex picture. The Chaikin Money Flow (CMF), a crucial momentum indicator tracking capital flows, has been on a downward trajectory despite the recent price rally.
This divergence between price action and capital inflow suggests that BNB’s upward move may lack the substantial buying pressure necessary for sustained growth.
BNB price surge not backed by buying volume
Further compounding concerns, the CMF has dipped below the zero line, signaling a bearish divergence. This technical setup indicates that while BNB’s price has increased, it is not supported by decent buying volume, raising questions about the sustainability of the current rally.
Source: Santiment
Market sentiment adds another layer of complexity to BNB’s outlook. The cryptocurrency’s weighted sentiment, a metric gauging overall market mood, stands at -0.52, reflecting a prevailing negative outlook among market participants.
This pessimistic sentiment, combined with weakening buying pressure, could potentially catalyze a reversal of BNB’s recent gains.
