Binance Coin price approaches critical mass, 18% move ahead for BNB
- 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
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
