BNB Open Interest Spikes, Triggering Short Liquidations Amid Heightened Volatility 

BNB, the cryptocurrency associated with the crypto exchange Binance, has emerged as one of the best-performing altcoins today. At press time, the coin trades at $568.58, surging nearly 7% in the last 24 hours.

However, BNB’s price is not the only aspect of the cryptocurrency seeing an increase. This on-chain analysis looks at other parts and what could be next for the coin.

Shorts Get Squeezed as Binance Coin Witnesses Rise in Net Positioning

One crucial Binance Coin metric that surged alongside the price is Open Interest (OI). OI refers to the value of outstanding contracts in the market.

When it increases, it means that traders are increasing their exposure to a cryptocurrency with the hope of making profits from the price movement. However, a decrease in Open Interest indicates that traders are closing existing positions and taking money out of the derivatives market.

As of this writing, BNB’s Open Interest is $408.10 million — the highest it has reached since July 4. The increase in this metric suggests a surge in speculative activity, which is strongly correlated with a price increase.  

Binance Coin Open Interest. Source: Santiment

Therefore, it is not out of place to mention that the hike in OI played a role in helping BNB price rise to $567. As a result of the price increase, traders with open short positions faced liquidations to the tune of $1.02 million within the last 24 hours.

Liquidations occur when an exchange forcefully closes a trader’s position due to insufficient margin balance to keep it open. For BNB, many of those liquidated were traders with overleveraged positions betting on a price decrease.

Read more: How To Buy BNB and Everything You Need To Know

Binance Coin Liquidations. Source: Coinglass

So, if the coin price continues to increase, traders who are unable to meet the conditions of these margin calls will have to cope with more losses.

BNB Price Prediction: The Road Remains Bumpy

Another look at the on-chain data provided by Santiment shows that BNB’s upside potential remains intact. This is due to the signals revealed by the one-day price volatility.

In crypto, volatility indicates how quickly prices can increase or decrease. If selling pressure increases amid high volatility, then the price of an asset decreases in a very short period. 

Since BNB is experiencing an uptrend, the rising volatility could strengthen the northward move, potentially driving the price to a higher value.

Binance Coin Price Volatility. Source: Santiment

If this continues, BNB’s price may retest $600. However, the technical perspective preaches due to the formation of a bearish flag on the daily chart.

A bearish flag appears when the slope of a trendline connects price highs and lows during consolidation. The flagpole in this pattern represents a drop in bulls’ dominance, allowing way for sellers to drag the price down.

While the prevailing parallel channel indicates a bounce, the bearish pattern suggests that bulls may be unable to maintain the upswing.

Read more: Binance Coin (BNB) Price Prediction 2024/2025/2030

Binance Coin Daily Analysis. Source: TradingView

If this happens, BNB’s price might drop to $525.80. However, increasing buying pressure may invalidate the thesis and possibly take the coin to $601.40.

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