- BNB could rebound in the medium term if the funding rate remains negative.
- A break above the $309.5 resistance could push the price up to $320..
AMBCrypto’s analysis of the Binance Coin (BNB) funding ratio shows that the coin could be poised for a rebound if history is any guide. Like other cryptocurrencies, BNB suffered a setback as its price fell from $334 to $291. This dump represents a 6.14% decline over the last 7 days.
Compared to other altcoins, Binance Coin seems to have shown better strengths. This is because many other top altcoins experienced double-digit declines during the same period.
Regarding funding rates, on-chain data assessed by Santiment shows them to be deep in negative territory. At press time, the indicator was -0.037%.
Source: Santiment
A positive funding ratio means that perpetual prices are trading at a premium compared to spot prices. A negative number means that the perp price is trading at a discount to the index price.
Possible recovery requires caution
When it comes to price action, a high negative funding ratio is a potentially bullish sign. This is because short selling is aggressive and therefore unrewarded. So price could be the key to support.
This claim is clearly evident in BNB’s historical performance. For example, the funding rate was similar on December 18th.
At that time, the BNB price was $243. However, by December 26, the coin’s value had risen to $305.
A similar scenario occurred in August 2023 as above. However, it is unclear whether the bounce will occur in the short term or take longer.
This led AMBCrypto to check out Liquidation HeatMap.
Liquidation HeatMap predicts the price level at which a trader’s position may be closed due to price movements and the margin balance that is inadequate to cover open positions.
As of this writing, data from HyblockCapital shows that a large liquidation could occur between $320 and $325. Therefore, long-term position traders looking to profit from these targets may need to be careful.
Source: Hiblock Capital
High leverage and low margin positions can lead to forced closures if these areas are affected. On the other hand, traders with positions targeting lower prices could benefit from a potential price increase, but at least as high as $290.
Lowest point, again high point
On the 4-hour chart, bears seemed to be controlling the narrative. However, the bulls were attempting to retest the $299.4 support. A breakout could help reverse the resistance at $309.5.
Additionally, the Relative Strength Index (RSI) could also support the uptrend. This is because at the time of press, the figure was 31.47, indicating that Binance Coin was oversold.
If the bulls overcome the downtrend, the oversold condition could trigger a rebound and steer BNB towards $320.
Source: TradingView
Read Binance Coin (BNB) price prediction for 2024-2025
However, 9 EMA (blue) and 20 EMA (yellow) were above the BNB price. This suggests a possible decline.
However, BNB’s recovery is still an option. The only problem is that it might not happen for another few days. However, it seems likely that this will happen in the mid to long term.