Financial markets, whether traditional or crypto-related, thrive on investor anticipations. Binance Coin (BNB) is currently drawing all the attention of traders.
Financial markets, whether traditional or crypto-related, are driven by investor anticipations. Binance Coin (BNB) is currently attracting the attention of traders. Some investors are taking long positions, hoping to profit from a price rebound, despite the 7% drop in the value of the crypto in a week. However, the market reality is quite different. Long positions are piling up, multiplying liquidation risks.
Traders are betting heavily on Binance Coin, as indicated by the funding rates for perpetual contracts. Since August 28, 2024, positive funding rates have prevailed, indicating a higher demand for long positions. This trend is continuing even as BNB continues to lose value. The price of BNB, currently set around $501.87, has been steadily declining.
In fact, market data shows that long liquidations have outpaced short positions. Last Wednesday, long liquidations reached $1.04 million, while short liquidations were less than $250,000.
Technical indicators are not optimistic, with the Relative Strength Index (RSI) of BNB down at 38.33. This momentum indicator shows that investors prefer to sell their tokens rather than bet on an immediate rise. Additionally, the Elder-Ray Index, which measures the respective strength of buyers and sellers, has been negative since August 27, 2024, indicating that sellers now control the market.
If the bearish pressure continues, long traders could lose even more. However, some optimistic data suggests a potential rebound towards $522.90. But for now, it remains a hypothesis, and nothing is ever really certain with cryptos.
Long traders are taking significant risks on Binance Coin. With technical indicators showing bearish signs and massive liquidations occurring, caution seems to be the watchword for investors. We can only hope that the next BNB burning, like the destruction of 1,643,698.8 BNB tokens, valued at around $971 million in July, will help the crypto soar again.
Graduating from Sciences Po Toulouse and blockchain consultant certified by Alyra, I joined the Cointribune adventure in 2019. Believing in blockchain's potential to revolutionize many sectors of the economy, I undertook the mission to educate and inform the public about this ever-changing ecosystem. My goal is to enable everyone to better understand blockchain and its opportunities. I strive each day to provide an objective analysis of the news, decode market trends, relay the latest technological innovations, and put the economic and societal stakes of this unfolding revolution into perspective.
