- Binance Coin price has shed 13% since forming a local top at $337.
- The correction will likely see a lot of buying pressure as BNB enters the $285 to $268 imbalance zone.
- A breakdown of the $255 support level will invalidate the bullish thesis for BNB.
Binance Coin (BNB) price correction is close to forming a local bottom, which could trigger a quick and volatile recovery rally.
Also read: Justin Sun withdraws $60 million in Ethereum, AAVE, SHIB, LINK among other assets from Binance
Binance Coin price ready for recovery rally
Binance Coin price breached the daily resistance level at $255 on December 20, 2023, which led to a 27% rally. This move set up a local top and eventually pulled back 13% to where it currently trades – $293.
If the ongoing correction continues to push BNB lower, it will dip into the $285 to $268 imbalance zone. This area was created when the Binance-based altcoin shot up 12% on December 26, 2023. An imbalance zone, also known as Fair Value Gap (FVG), is formed when there is a significant discrepancy between the buying and selling pressure at a specific price level.
Often a reentry of price in this area results in a sudden spike in buying pressure. As such, Binance Coin price should witness a similar spike after entering the $285 to $268 buy-side imbalance zone.
The resulting bounce could send Binance Coin price up by 18% to collect the buy-side liquidity resting above $337. Additionally, if the bullish momentum remains strong and Bitcoin price recovers, it could resume the altcoin buying spree. In such a bullish case, BNB could shoot higher and tag the 161.8% Fibonacci Retracement level at $403. This move would constitute a 42% gain from the upper limit of the buy-side imbalance.
Read more: BNB price could rally 30% as Binance launches crypto exchange services in Thailand
BNB/USDT 1-day chart
On the other hand, if Binance Coin price fails to bounce off the imbalance zone, extending from $285 to $268, the correction could push BNB lower. A daily candlestick close below $255 will invalidate the bullish thesis by producing a lower low relative to December 24, 2023, swing low at $260.
In such a case, Binance Coin price could crash 9.40% and tag December 18, 2023, swing low at $232.
Read more: Binance Coin price hovers around $300, unbothered by the potential spot Bitcoin ETF approval
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Celebrity meme coins controversy continues amid Pump.fun revenue dominance
Pump.fun outperformed the Ethereum blockchain on Tuesday after raking in $1.99 million. Following this achievement, a meme coin based on actress Sydney Sweeney was the subject of controversy after its developers dumped their bags on investors.
PEPE's on-chain metrics indicate potential rally after weeks of silence
PEPE has struggled to see any significant price move after reaching an all-time high in May. Increased adoption rate and low MVRV ratio indicate a bullish run may be on the horizon. A single PEPE outflow from Binance worth $14.7 million gives credence to signs of bullish expectation.
Ethereum has failed to overcome key resistance despite bullish sentiment surrounding ETH ETF
Ethereum (ETH) is down more than 1.4% on Tuesday following another ETH sale from the Ethereum Foundation. Meanwhile, crypto exchange Gemini's recent report reveals that ETH ETF could see about $5 billion in net inflows within six months of launch.
Crypto community blasts Polkadot following report of treasury spending
Polkadot reports $87 million of treasury spending during H1. Crypto community members expressed harsh feelings toward the DOT team's high spending. DOT is up more than 2% in the past 24 hours but risks correction following the report.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.