Financial markets, whether traditional or crypto-related, feed on investor expectations. Binance Coin (BNB) is currently attracting all the attention of traders. Far from being discouraged by the 7% drop in the value of the crypto in one week, some investors are taking long positions, hoping to profit from a price recovery. However, the reality of the market is quite different. The risks of liquidation are multiplying, with long positions accumulating.
Long positions soar despite the storm
Traders are betting big on Binance Coin, as evidenced by the perpetual contract funding rate data. Since August 28, 2024, positive funding rates have been prevalent, indicating stronger demand for long positions. This upward trend in long positions comes as BNB continues to lose value. The BNB price, currently pegged at around $501.87, has been steadily declining.
Indeed, market data shows that long liquidations have outpaced those of short positions. Last Wednesday, Long liquidations reached $1.04 million, while short liquidations were less than $250,000.
Technical indicators in the red
Technical indicators leave little room for optimism. BNB’s Relative Strength Index (RSI) is currently down, with a position at 38.33. This momentum indicator shows that investors prefer to sell their tokens rather than bet on an upcoming rise. In addition, the Elder-Ray Index indicator, which measures the respective strength of buyers and sellers, has been negative since August 27, 2024. This means that sellers now control the market.
If the bearish pressure continues, long traders could lose more. However, some optimistic data suggests a potential recovery towards $522.90. But for now, this is just a hypothesis. Nothing is really very certain with cryptos.
Long traders continue to take significant risks on Binance Coin. Between declining technical indicators and massive liquidations, investors seem to be cautious. We may be hoping that the next BNB burn, like the destruction of 1,643,698.8 BNB tokens worth around $971 million in July, will allow the crypto to soar again.
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