Why is BNB price up today?

The 3% rise in the price of BNB (BNB) today is partially attributed to bearish traders who initiated more BNB-linked contracts, despite having experienced liquidations during the last 24 hours. Furthermore, BNB is extremely “oversold,” likely inciting traders to take advantage of the drop.

BNB price bounces after being “oversold” 

On June 14th, BNB experienced a surge of almost 4% to $253. This marked a recovery from a six-month low of $220 two days prior, with the price having rebounded by 12%.

From a technical standpoint, the increase in BNB on June 14 was a result of it being “oversold”. Notably, the daily relative strength index (RSI) dropped to a level of 16.6 two days ago, the lowest it has been since March 2020.

An RSI reading that is less than 30 usually signals an upcoming period of market consolidation or recovery.

For example, in December 2022, the BNB’s daily RSI being below 30 was a precursor to a 50% increase in price over the following two months.

BNB funding rate flips negative

On June 10, the BNB funding rate dropped below zero and has remained in negative territory since. In other words, bearish traders are paying bullish traders to maintain their bearish positions.

Open interest in BNB has recently reached a one-month peak of approximately $377 million, while the overall trend has been downward. This indicates that many traders are expecting further losses, which often leads to a price recovery if short positions are closed.

Key BNB price level to watch

BNB’s prices have recovered following a dramatic drop of 25% last week, which was caused by the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Binance, in which BNB was labeled as an “unregistered security.”

The SEC and Binance.US are in talks to reach an agreement that would prevent a total asset freeze.

In recent years, the price of BNB has been affected by the wider downtrends in the cryptocurrency market, as demonstrated below.

Each time, BNB has been found to have strong support at around $220, which bulls contend should make this an optimal purchase area following the SEC-induced price decrease — if events follow the same pattern as before.

As of June 14, the BNB/USD pair has been trading within the $240-250 range, a period of consolidation that began in December 2022 and extended into January 2023.

Should the price close firmly above the $250 resistance line, the primary objective for the third quarter will be its 50-day exponential moving average (50-day EMA; the red wave) close to $300, which would represent an increase of around 20% from current levels.

Should the price close below $240, it is likely to fall towards $220. If the decline persists, the next support level to observe is likely between $180 and $205.

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