Cryptocurrency Market Analysis, December 19

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Arman Shirinyan

BNB is in a solid recovery and is showing strong results against the anemic cryptocurrency market

Contents

  • The rapid rebound of BNB
  • The reversal of Dogecoin

BNB has kept the cryptocurrency market in the spotlight in recent weeks as transactional activity on cryptocurrency exchange Binance and BNB-based products have been at one of their highest levels all year. When the FUD around the trade ended, the BNB price soared, leaving some bears at a loss.

The rapid rebound of BNB

Over the past two days, BNB has gained more than 11% in value, showing a well-above-average performance in the market as most cryptocurrencies have rapidly lost value against Binance’s underlying cryptocurrency.

BNB chart
Source: TradingView

After peaking to the upside, BNB hit a relatively insignificant selling wall, facing a healthy 2.5% correction to the local high. According to on-chain data, network activity is still soaring, up 9% in the past few hours.

We are also seeing an increase in the average rate on the network, which could be seen as a sign of long-term growth as more validators could join the network to ensure its stability and participate in its governance.

The following indicators such as volume profiles and moving averages are not yet giving distinctive signals. Lack of direction may not be a good sign for investors, as it limits capital inflows into assets due to short-term trend indecision.

The reversal of Dogecoin

The massive 120% price pump we witnessed on Dogecoin over the past month turned to dust as the meme coin returned to the price level we saw before the Twitter takeover. The declining volume profile we highlighted in our previous reviews was the primary signal for a price reversal.

The lack of trading volume on the asset causes an outflow of funds which support local rallies and serve as fuel for every movement of the asset. As the distribution of holders suggests, the majority of Dogecoin investors are short-term holders who got their assets during the rally or even after meme assets hit a local high.

As of press time, Dogecoin is trading at the $0.07 price level, which correlates with the level of support that has not yet been broken after two tests in November. In case of volume recovery, the expected outcome would be a rebound to the current price, which, however, is a relatively complicated task that may not turn into a reality with the current state of the market and Dogecoin in particular.

In general, the cryptocurrency market is in a state of stagnation and assets are not recovering or are under excessive pressure from investors. Both large and small caps are losing insignificant portions of their value over the past 24 hours, but due to a lack of volume and volatility in the market, we are unlikely to see any notable movement in the market through the end of the year.

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