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Last week, the price increase of Binance Coin (BNB) combined with a declining trend in the Chaikin Money Flow (CMF) could indicate a potential reversal, signaling a downturn in prices. BNB is trading at the $586 level. According to CoinMarketCap, the value of the altcoin increased by nearly 10% last week. During the same period, the CMF indicator on the 24-hour chart initiated a downward trend. This indicator measures the flow of money into and out of a token over a certain period.
Chart Analysis for BNB
When a token’s price increases during CMF dips, it reveals a bearish trend. This inconsistency indicates that buying pressure is weak despite the price rise. Following weakened buying pressure, the market’s buyers may not sustain further price increases, often leading to a downward correction. An examination of some technical indicators on BNB’s daily chart suggests that it may lose some of its gains from the past week in the short term.
According to the Moving Average Convergence Divergence (MACD) indicator, the MACD line crossed below the signal line on March 19th. The downward crossing of the MACD line with the signal line can be considered a bearish sign, suggesting that a token’s short-term moving average is losing strength relative to its long-term moving average. Investors noticing this formation might interpret it as a confirmation that market sentiment is shifting from bullish to bearish, and the growing selling pressure could potentially lower the token’s value.
Price Performance of BNB
BNB’s price has increased by 10% since the aforementioned crossover, but this merely reflects the overall market performance. The price rise is not supported by significant demand. The Money Flow Index (MFI) indicator, which returned a value of 48.18 and was trending downward at the time of writing, indicates that selling pressure is outpacing buying activity among market participants.
While BNB appears ready to lose some of its gains, volatility indicators suggest a low probability of significant price fluctuations in either direction. The gap between the upper and lower bands of the cryptocurrency’s Bollinger Bands (BB) indicator was quite narrow. This suggests that price volatility is relatively low. Confirming this, the token’s Bollinger Band Width (BBW) was trending downward at the time of writing.
