Here are Indications That BNB is Gearing Up For a Short Squeeze

BNB prints a doji at the time of writing. The latest candlestick pattern follows the asset’s failure to register any significant price changes in the last 24 hours.

Nonetheless, trading actions over the last two days hint at the continuation of a pattern. Sunday ended with a red candle as the altcoin retraced from $599 to $585, losing more than 2%. It recovered the lost value the next day.

While such moments of sharp increases in volatility are noteworthy, they point to a larger sideways movement. The coin has been on a gradual descent since Apr 23. It was rangebound for most of the last fourteen days before a slight breakout on Sunday. 

The one-day chart reveals several small breakouts and indicates an impending move. Nevertheless, it is worth noting that investors’ interest in the altcoin is growing. 

A Steady Rise in TVL

Binance Chain saw a spike in trading activity last month. The launch of several memecoins sparked a run that many believed may continue in May. However, the asset failed to keep trading above reclaimed levels. It ended April with slight losses as it declined.

Nonetheless, data from DeFiLlama suggests a correlation between a rise in DEX volume and BNB price. A rise in decentralised exchange trading volume may indicate an impending short squeeze. The chart below depicts volume and TVL and makes the previous claim clearer. 

In the days before the massive surge on Apr 9, DEXs’ volume sharply increased. A similar event happened before the over 3% hike on Apr 22. The chain is seeing a similar trajectory. Buying and selling on its decentralised exchanges doubled in the last 24 hours, surged from 1.49m BNB to 2.92m BNB. 

Its leading DEX, Pancakeswap, registered a similar change. However, another metric highlights the reason for the massive increase. Active addresses spiked in the last three days. Such a sharp change may indicate more interaction with the BNB chain. However, this does not guarantee an upside movement.

It is also worth noting that more investors are locking up their assets. The total locked value steadily rose over the last month, hinting at growing confidence in the coin’s long-term prospects.

BNB May Surge

Binance coin is gearing up for another significant move. The one-day chart shows that several indicators are gradually turning bullish. One such indicator is the moving average convergence divergence. Last week, its 12-day EMA crossed the 26-day EMA from above as trading conditions worsened. The negative divergence would mark the start of further declines.

However, Monday’s price actions alter the metric’s direction. It is trending on a straight line, marking an improvement and a buy signal as further buying pressure will result in a bullish convergence. 

The bollinger bands point to an impending breakout as the lower and upper bands move closer to each other. The constriction may indicate an impending short squeeze.

While MACD hints at an upward breakout, BB does not give a time frame for when this will happen. Nonetheless, based on the notable increase in DEX volume, BNB may see such a move within the next three days. 

An upward movement may send the coin to retest the $610 resistance. However, its current price trend indicates a possible slip to $585 if it loses the $595 mark. 

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