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Binance Coin (BNB) price fell by 10.6% from January 21 to January 25. Despite the downward trend, experts are evaluating whether BNB is ready to compensate for its recent losses after reaching the lowest levels of the month.
Resistance Zone in BNB
The decline in the cryptocurrency’s price can be partly associated with decreased activity on the BNB network. A recent report highlighted that the number of daily active wallets on BNB network dApps has been on a downward trend since December 31, 2023. The 12-hour BNB chart highlighted a range extending from $289 to $316. The mid-range was at the $307 level, which is within a resistance zone on the weekly chart.
Despite rising to $338 at the end of December, the bulls were sharply rejected. Since that period, the price has struggled to surpass $320. The latest selling pressure reversed the momentum, and the Relative Strength Index (RSI) quickly retreated below the neutral 50 level. This could indicate that the selling volume has not been too high in recent days. It could also mean that the bulls have a chance to recover from the recent losses. Last month’s price action showed that the $288-$296 region is a demand zone.
Critical Level in BNB
Until the mentioned situation changes, prices can be expected to rise above $300. The $287 level in BNB was tested on January 25, and there were about $600 million in estimated liquidation levels. Data showed that the $280-$290 region is of interest. Another drop in liquidity could offer a buying opportunity. However, the rest of the cryptocurrency markets were in a downtrend.
Therefore, investors showing a bullish trend might proceed with caution when buying BNB and reduce their position sizes accordingly. Bitcoin was trading just below the $40.2k level, which was previously support. Rejection at $40k could lead to a sharp decline in BTC prices, which BNB could likely follow. This could see the token at $280 or even lower levels.
