Binance Coin (BNB) experienced a 10.6% price drop from January 21 to January 25, sparking analysis on whether it could recover from recent losses after hitting a one-month low. The decline is partially attributed to decreased activity on the BNB network, with a noted decrease in daily active wallets engaging with dApps since December 31, 2023.
Despite a rise to $338 at the end of December, bulls faced a strong rejection, and the price has struggled to surpass $320 since. The latest selling pressure reversed momentum, with the Relative Strength Index (RSI) falling below the neutral 50 level, indicating low recent selling volume and a potential chance for bulls to recover losses. The price movement last month highlighted the $288-$296 region as a demand zone.
The $287 level was tested on January 25, with an estimated $600 million in liquidation levels, suggesting interest in the $280-$290 region. Another drop in liquidity could present a buying opportunity, yet caution is advised for investors due to the overall bearish trend in crypto markets.
Bitcoin is trading just below the previously supportive $40.2K level, and a rejection of $40K could lead to a sharp decline in BTC prices, potentially affecting BNB as well. This could see the token drop to $280 or lower.
In conclusion, BNB’s resistance zone lies between $289 and $316, with $307 as a key level. Investors should be wary of the broader market trend when considering BNB purchases, as further declines could follow if Bitcoin’s price falls significantly.
