BNB is under renewed selling pressure as the latest recovery attempt failed, leaving the cryptocurrency vulnerable to further losses. Despite a brief upward move, BNB failed to break key resistance levels, prompting fears of deeper declines. With technical indicators signaling potential weakness ahead, the question now is whether the token can recover or whether further losses are inevitable.
As bearish sentiment intensifies, this analysis aims to evaluate technical indicators signaling weakness in BNB’s price action and whether the asset is poised for a rebound or more declines ahead. By examining key support levels, market sentiment and price trends, the goal is to determine BNB’s next move and the likelihood of a reversal of the uptrend or continued bearish momentum.
Key Technical Indicators Warning signs are flashing
BNB recently entered bearish territory on the 4-hour chart, dipping just below the 100-day basic moving average (SMA) and approaching the key support level at $531. This drop below the 100-day SMA indicates weakening strength, and as sellers take control, the cryptocurrency could potentially suffer greater losses.
Analysis of the 4-hour Relative Strength Index (RSI) shows that the signal line has dropped below the 50% threshold towards 42%, suggesting that buying pressure is easing as the RSI moves deeper into bearish territory. Typically, an RSI reading below 50% means sellers are gaining control, which can lead to downward price pressure.
After encountering resistance at $587, BNB showed a significant downward move on the daily chart, characterized by the formation of a forceful bearish candle. The price has now fallen towards the 100-day SMA, signaling increasing selling pressure. If the negative trend continues, BNB may experience additional declines, leading to less buying interest.
Moreover, a closer look at the RSI on the 1-day chart shows that the signal line has dropped below the 50% threshold again and is currently at 48%, after previously rising above it. Unless the bulls step in to change the momentum, the market could be set for further declines as the current RSI level suggests weakening purchasing power and increased bear control.
Trading Strategy: Navigating the BNB Bearish Squeeze
BNB’s recent price action points to the potential for further declines if the downward momentum intensifies. If the price reaches the critical $531 mark and closes below it, it could pave the way for further losses, possibly pushing the asset towards the $500 level.
However, if buyers step in and regain control at $531, there is a chance of a bullish reversal and the price will begin to move higher towards the 605 resistance level, especially if the RSI shows signs of recovery.