Why could the BNB rise by 13%?

• Binance Coin finds support around the previously broken downtrend line, eyeing a rally ahead.
• On-chain data paints a bullish picture as BNB’s OI-weighted funding ratio is positive and the long-short ratio is above one.
• A daily candle close below $468.70 would invalidate the bullish thesis.

Binance Coin (BNB) is retesting its previously broken trendline on Sunday and rose 2.73% on Monday. At the time of writing in the Asian trading session on Tuesday, it continues to trade higher. On-chain data supports the BNB’s bullish price action as the long-short ratio is above one and the funding ratio is positive.

Binance Coin price is poised for a rally after pullback support holds

Binance Coin price retested and found support on Sunday from the previously broken downtrend line (drawn by connecting multiple June 6 highs). The next day, it increased by 2.73%. Since Tuesday, it continues to trade up 1.5% at $534.70.

If this support level around $499.20 holds, BNB could rise 13% to retest the August 23 high of $599.60.

The Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the daily chart are about to break their neutral levels of 50 and zero, respectively. If the bulls do come back, then both momentum indicators need to hold their positions above their respective neutral levels. Such a development would add a tailwind to the recovery rally.

BNB/USDT daily chart

Coinglass’ OI-weighted funding ratio data is an important metric for traders and analysts to gauge market sentiment and predict future price movements. This index is based on futures contract yields, which are weighted by open interest rates. Generally, a positive rate (longs pay shorts) indicates bullish sentiment when longs pay shorts. Conversely, negative numbers (shorts pay longs) indicate bullishness, and shorts pay at the expense of longs.

In the case of BNB, the metric is at 0.0023%, reflecting a positive rate, indicating longs pay short. This scenario often signifies bullish sentiment in the market, suggesting a potential upward movement in Binance Coin price.

Graph of the weighted funding rate according to BNB OI

Coinglass’ BNB long-short ratio is also 1.31, supporting the bullish outlook. This report reflects bullish sentiment in the market as the number above suggests that more traders are anticipating the asset’s price to rise.

Chart of the long-short BNB ratio

Even though on-chain metrics and technical analysis support the bullish outlook, if Binance Coin makes a daily candlestick close below $468.70, the bullish thesis would be invalidated by creating a lower low on the daily chart. This development could see BNB fall 14% to retest its August 5th low of $400.