- Market players to tread with caution as liquidation risks for long Binance Coin [BNB].
- Sol Flips BNB, although Binance bulls have continued to build upon momentum.
The native token of the Binance network BNB, is facing major pushback as market conditions worsen. Although altcoins are collectively making a slow recovery to reclaim previous price levels, BNB bulls might have to work even harder in the coming weeks. As such, market sentiments are expected to become increasingly bearish.
According to recent market data, the Binance Coin (BNB), highlights major dangers for long holders as liquidation risks heighten. Liquidations happen because traders’ leveraged positions are forcefully closed by cryptocurrency exchanges. This typically happens when the market moves in an opposite direction to the trade, as a result, the traders no longer meet the margin requirements.
Liquidations are alarming for crypto traders as they pose a major threat to traders’ funds. When liquidations occur, traders have no choice but to close their positions. The result is a partial and sometimes even a total loss of initial margin. In the case of BNB traders, the road ahead is partially gloomy in the near term.
According to data from HYBLOCKCAPITAL, liquidity levels are spotted around the $329 to $340 price levels. Notably, liquidity levels are positions where significant levels of liquidation can happen. As such, traders are to watch the aforementioned price levels closely. However, the potential upswing in liquidity levels around those prices doesn’t take away from BNB’s ability to tap those price points.
On-chain data spotlights notable metrics, outlines BNBs current movement patterns
BNB could surpass these price levels, however, sustaining prices in the long term might be difficult. Short-term traders might evade the beat storm, while traders with long positions might be at the receiving end of market volatility.
However, on a positive note, on-chain data reveals that volume has surged to a whopping $1 billion. This massive increase can be regarded as a bullish signal, as it hints that interest rates for Bitcoin amongst market participants are rising. Conversely, data from Santiment, a leading on-chain market platform, showed that Binance Coin’s Funding Rate was at -0.008%.
Funding rates are fees that are set by crypto exchanges to sustain balances between contract prices and underlying asset prices in the derivatives markets. A positive percentage implies that prices are trading at a premium, while spot prices are not. However, with these metrics being negative, it implies that short positions are not as Inin tense at this time.
Meanwhile, at the time of this report, the Binance Coin is trading for $328, as hourly and weekly gains continue to pile up. Although the asset recently got flipped by a long-standing rival altcoin Solana (SOL), buying pressure for the Binance coin has remained stronger at report time.
