BNB has recently encountered a major rejection at a crucial resistance level, sparking concerns among traders about a potential price correction. Despite a strong rally, the momentum has waned, leaving the cryptocurrency at a pivotal juncture.
The rejection at this key level signifies a strong barrier, hinting at increasing selling pressure as bears enter the market. The big question now is whether this rejection signals the start of a downward correction or if the bulls can rally to push the price higher once again.
As the market grapples with this critical moment, this article will delve into BNB’s recent rejection at the critical resistance level and analyze its implications for the price trajectory. By examining market trends, technical indicators, and trading volumes, we will explore the potential for a correction and its impact on traders.
Indicators Pointing Towards a Downside Correction for BNB
Recently, BNB’s price has turned bearish on the 4-hour chart, retracing towards the 100-day Simple Moving Average (SMA) after being rejected at the $605 resistance level. This downward movement signifies a shift in market sentiment as bulls struggle to sustain their upward momentum. The rejection at $605 has triggered increased selling pressure that could lead to a potential correction.
An analysis of the 4-hour Relative Strength Index (RSI) indicates that the signal line has dropped to 57%, moving away from overbought territory. This decline suggests a weakening bullish momentum as buyers start to lose steam.
On the daily chart, BNB is displaying negative momentum with the formation of a bearish candlestick despite trading above the 100-day SMA. This discrepancy in market sentiment could lead to a significant price drop if selling pressure persists and BNB fails to hold above the 100-day SMA.
Lastly, on the 1-day chart, the RSI has dipped to 69% after reaching 62%, indicating strong bullish sentiment and buying pressure. While the RSI remains above 60%, signaling a bullish outlook, the recent decrease suggests a slowdown in upward momentum.
Key Support Levels to Monitor Following the Rejection
After the rejection at the $605 resistance level, the critical support zone to watch is around $531, where buying interest could emerge. A drop below this level could signal a deeper bearish move, potentially pushing BNB towards the $500 mark and beyond. These key levels are crucial for traders to monitor in the short term as a break below them could intensify selling pressure.
If the bulls manage to stage a comeback and push the price above $605, BNB could continue its upward trajectory towards the next resistance level at $635. A successful breach of this level could lead to further gains and the challenge of higher resistance points.
Image source: Adobe Stock, chart from Tradingview.com