The case for and against BNB dropping to $200

• BNB’s Open Interest and long/short ratio revealed that traders expect the price to fall
• Selling pressure heightened as whales also joined in

Coinglass data revealed that Binance Coin [BNB] short positions have continually overridden the longs, as indicated by the long/short ratio. Considered a barometer of investors’ expectations, the long/short ratio underlines the amount of available short contracts against those positioned in longs.

Read Binance Coin’s [BNB] Price Prediction 2023-2024

At press time, BNB’s long/short ratio was 0.94. Since this value was below 1, it suggests that the broader anticipation is for the coin’s price to decrease. Conversely, a value above 1 would have indicated positive expectations.

Source: Coinglass

It’s not respite season yet

Lately, the exchange coin has been subject to selling pressure, caused by the rift between Binance and regulators from the U.S. As a result of this issue, BNB has lost 22.92% of its value in the last seven days.

Also, Binance CEO Changpeng Zhao (CZ) has tried to stop the FUD by explaining how the exchange is still standing strong, despite massive outflows. However, the effect has not been exactly glaring for BNB. 

Regardless, the decline in price did not necessarily impact the Open Interest (OI). The OI gauges market sentiment by considering the total number of outstanding futures or options contracts in the market.

When the Open Interest falls, it indicates exiting liquidity, low volatility, and attention towards an asset. When it rises, it suggests high volatility and increases money flow into underlying contracts.

In BNB’s case, however, the OI hike, alongside a decline in BNB’s value, might be to further strengthen the prevailing trend of the price action. Therefore, it might take a while before the coin reverses itself on the charts. 

Source: Coinglass

Price action in bearish hands?

On the technical side, BNB has been increasingly losing support. On June 5, strong support drove the coin’s price to $285. However, it faced a sold resistance which pushed back the price. And since then, it has been on a downward slope.

As per the 4-hour chart, the Awesome Oscillator (AO) hit the negative axis. A negative reading of the AO implies that BNB’s 34-period Moving Average (MA) had outpaced the 5-period MA. Hence, this puts bears in high authority and BNB’s price could fall further.

Realistic or not, here’s BNB’s market cap in BTC terms

If BNB is to escape its impending fall, then buying pressure has to increase below $222. But like the AO, the Directional Movement Index (DMI) indicated that sellers have been in control of the market.

At press time, the -DMI (red) was 34.69. On the other hand, the +DMI (green) was 15.21 while the Average Directional Index (ADX) was as high as 57.41. Ergo, the selling pressure has strong backing, with the downtrend likely to continue too. 

Source: TradingView

In a related development, Lookonchain reported that a whale who once held 10,000 BNBs for about two years has now sold them – More evidence of selling pressure in the market. 

1/ A whale that has been dormant for 2 years sold 10,000 $BNB ($2.3M) at $230 today.

This whale was a #SAFEMOON whale before and made 110K $BNB ($47.5M at that time) with only 10 $BNB($2,400 at that time) on #SAFEMOON. pic.twitter.com/jxuBJBcWad

— Lookonchain (@lookonchain) June 12, 2023