Binance Coin (BNB) experienced a bearish divergence in the market over the past few days, contributing to its recent price decline. The exchange token was rejected from the significant psychological level of $600 in late August, and this rejection has continued to affect its movement.
This decline has placed BNB in a challenging position as it trades at $494.71 at press time, with a 24-hour trading volume of $1.19 billion. The token has experienced a -1.55% drop over the last 24 hours and a -7.60% decline in the past seven days.
High-Density Liquidity Pool
The weekly resistance zone for Binance Coin has formed a high-density liquidity pool around the $615 mark. This suggests that BNB prices could see an upward pull toward the $600 region.
However, a strong likelihood remains that the token will face rejection once it breaches this psychological barrier. The current market conditions indicate that while Binance Coin may attempt to climb past $600, its journey northward may be brief due to selling pressure near the resistance.
Elsewhere, the growing imbalance between short and long liquidations on lower timeframes suggests that a short squeeze could be imminent for Binance Coin. As short positions outnumber long positions, any sudden price movement could trigger a squeeze, potentially leading to a brief upward surge in prices. Despite these developments, traders remain cautious as the rejection at $600 continues to play a critical role in BNB’s trajectory.
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In addition, the imbalance in lower timeframe liquidation levels has been growing. There has been an increase in short liquidations, outnumbering the long liquidations. This suggests that a short squeeze could be on the horizon, as market dynamics could shift if the bearish sentiment continues to dominate.
CMF Signals Weakening Bullish Pressure
Per data from TradingView, the Chaikin Money Flow (CMF) indicator recently dropped below +0.05 on the daily chart, signaling a weakening in bullish pressure for Binance Coin. This decline in CMF underscores the challenges bulls are facing in maintaining upward momentum. Despite the weakness in bullish signals, the On-Balance Volume (OBV) has shown slight improvement over the past month. This gives some investors hope for a potential upward move, but the overall trend remains uncertain.
Resistance at $600 continues to pose a significant challenge for Binance Coin, while the $450 support level appears more fragile in comparison. As the market awaits further developments, traders will closely monitor the interaction between these levels in the coming days.
