- On-chain BNB liquidity growth has been significant, with the potential to rise to $730 USD on the chart.
- Market sentiment shows that selling pressure exists, but buying volume may be able to reverse the situation.
For the first time in over a month, BNB has recorded a price increase on the chart, with the cryptocurrency rising nearly 2% in 24 hours. This occurred after the previous downtrend caused investors to lose nearly 17% in value.
This increase could mark the beginning of a major move, especially if BNB breaks through a key resistance level and selling pressure in the Derivative market eases. Therefore, it is worth exploring the potential movement of BNB in depth.
Strong liquidity flows support BNB price
According to analysis from TinTucBitcoin, there have been significant inflows of capital into the BNB chain, and these flows have been increasing recently. These capital flows not only contribute to the price increase, but also drive an increase in the Total Value Locked (TVL) ratio.
TVL measures the amount of BNB deposited and locked on various protocols within the BNB chain. The increase indicates that many investors are locking their assets, expressing confidence in the potential price increase.
Source: defillama
From March 12-15, the TVL of the BNB chain increased by $496 million, representing the amount of BNB locked in various protocols. The scale of this liquidity flow is accompanied by an increase in the number of active addresses during this period.
At the time of writing, active addresses have reached a peak of 1.1 million after recording a low of 959.2K on March 8, with the number of transactions reaching 4.5 million. The development of these indicators, along with price and TVL, points to the dominance of buyers in the market.
BNB faces a key resistance level
The price increase has pushed BNB to a resistance level that has formed since mid-February. In the two previous instances when the price touched this resistance level, the entire market witnessed a decline.
If this level is breached, there is a high probability that the asset will record an additional 23.48% increase, reaching up to $732 USD.
Source: TradingView
The technical indicators on the chart have suggested the potential for a market price increase. Currently, the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) both indicate a bullish context for the altcoin.
The daily movement of the RSI also reveals that the asset may continue its uptrend. Particularly when the RSI appears to be approaching the overbought region, above the 50 level.
Source: TradingView
The MACD has also formed a classic 'golden cross' pattern, appearing when the green MACD line crosses above the orange Signal line.
Such a pattern is often seen as a signal for an upcoming price increase. If this occurs, a BNB price breakout may be imminent.
Derivative data shows conflicting sentiment among traders
Despite the high bullish sentiment in the market, some traders have continued to sell. At the time of writing, Open Interest in both the Futures Contract and Options markets have decreased by 2.30% and 1.56%, respectively.
A decrease in Open Interest means that the outstanding contracts in the Derivative market may be filled by short-term traders who expect the price to decline. This often hinders price increases or has a negative impact on the market.
Source: Coinglass
However, Derivative traders on Binance and OKX have continued to buy, with the long-short ratio displaying 1.43 and 2.18, respectively. When this ratio is above 1, it means that the buying volume is greater than the selling volume. And the further it is from 1, the stronger the buying pressure in the market.
If Derivative traders on these exchanges continue to buy, the selling pressure from other parts of the Derivative market will be very limited. Only then can the BNB price break through on the chart.
