Binance (BNB/USD) is trading above a $266 support zone. At the current valuation of $281, BNB is down 30% since nearly breaking above $400 a few days ago. A risk contagion is responsible for this.
First, the collapse of FTX prompted caution about the financial health of crypto exchanges. As an exchange-affiliated cryptocurrency, BNB has not been spared either. Second, although the US inflation rate fell in October, it remains high. Further rate tightening is possible even as investors eye Federal Reserve easing.
With increasing risks, Binance does not take risks. CEO Changpeng Zhao recently announced that the crypto exchange has increased its safe asset fund for users to $1 billion. This decision reassures the market shaken by the collapse of FTX. On November 14, CZ announced the creation of an industry fund. The fund will bail out “strong” crypto firms facing a liquidity crunch.
Amid growing concerns and developments, BNB bulls are defending $266. The level has become significant as BNB has yet to trade below since a breakout in July. BNB has a real chance of recovering from this level if the bulls hold their ground.
BNB Defends $266 Amid Low Momentum and Bearish MACD Crossover
Source – TradingView
Technically, we should consider BNB bearish. Momentum is weak, while the recent MACD crossover supports a bearish view.
However, since BNB settled at $266, the price has regained its stability. Several inside bars can be seen at key support, indicating indecision in the market.
Should you buy BNB now?
Prospects are mixed for BNB price to the support area. The bulls are defending $266, but the technical indicators are showing a bearish market.
If BNB continues to maintain stability, we should watch for bullish bars to form at key support. This could welcome some bullish momentum. Alternatively, a breakout of the inside bar pattern should also attract buyers to the token.
A bullish confirmation should take BNB back to the resistance at $360. We must, however, monitor crypto sentiment to consider the level around $400 attainable.
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