Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author
The continued selling pressure on Binance Coin [BNB] finally saw the bears break below the key $303 support level. The support level was under constant fire from sellers, with the price testing the level four times between May 12 and June 3.
The bearish momentum of the past 24 hours that broke through the bullish defenses may have been triggered by the events surrounding the recent SEC lawsuit against Binance.
Read Binance Coins [BNB] Price forecast 2023-2024
With Bitcoin [BTC] desperately clinging to the $26k price zone, BNB bears could try to extend shorting gains.
Continued selling pressure forces breakout range
Source: BNB/USDT on trade view
BNB has been in a downtrend since April 18 after the price rejected at the USD 350 resistance level. The bearish momentum saw the price break the $318 support level before a bullish rebound at the $303 support level halted the selling pressure. The bulls’ staunch defense of the $303 support led to sideways price trading as attempts to rally met stiff resistance at the $318 resistance level.
For the past 48 hours, the price has hovered just above the support level, and recent events may have accelerated the level’s breakout. The markets reacted negatively to the SEC’s lawsuit against Binance that saw BNB investors flee to the safety of stablecoins. Continued selling pressure on the 12-hour time frame caused BNB to break the $303 and $283 support levels.
Meanwhile, the Relative Strength Index (RSI) remained in oversold territory at 19. The Chaikin Money Flow (CMF) also stood at -0.16. Both indicators taken together showed that the weight of selling pressure weighed on buyers.
An increase in bearish activity could push the price of BNB to its March low of $265. If bulls fail to rally before then, the $265 price zone could serve as a potential stronghold for a sustained bullish reversal.
Rising hopes deflated by a rapid decline in active addresses
Source: Sentiment
A look at the 7d active address data of Sanitation showed heavy bearish sentiment among market speculators. The active addresses as of May 31 were over 20,000. However, it experienced a sharp drop and stood at 5.3k at the time of writing. This large decrease in BNB interactions led to prices falling lower.
How much are 1,10,100 BNBs worth today?
Similarly, the Market Value to Realized Value (MVRV) ratio showed that BNB was in the undervalued area. The MVRV stood at -5.14% at the time of going to press. This showed that BNB holders were holding on to unrealized losses.
With the SEC lawsuit looming over Binance, traders should be careful to avoid volatile price movements.