What is driving the current increase in BNB price?

What is driving the current increase in BNB price?

BNB Price Rally: A Closer Look

The momentum of BNB (BNB) price has been notably bullish, reaching a significant milestone on Feb. 22 by surging to $387. This marks its highest value since November 2022, showcasing a remarkable 9% increase in the last 24 hours.

Reasons Behind the BNB Price Rally

Capital Rotation from Bitcoin to BNB Market

BNB’s price rise in the last 24 hours coincides with Bitcoin’s (BTC) 2.5% drop versus the U.S. dollar. This divergence is particularly pronounced in the BNB/BTC trading pair, which has seen an increase of over 11%, highlighting a significant shift in market dynamics between these top-ranking cryptocurrencies. Traders are potentially rotating out of the Bitcoin market to seek safety in BNB, evident in BNB’s market dominance, which has jumped from 2.74% to 2.99% in the last 24 hours.

Portal Launch on Binance Launchpool

The recent surge in BNB’s price aligns with the debut of Portal (PORTAL), a cross-chain gaming platform on the Binance Launchpool. This launch serves as a potential catalyst for increased investor interest and capital inflow toward BNB. The Portal launch includes a staking pool allowing users to stake their BNB and FDUSD into separate pools to farm 50 million PORTAL tokens until Feb. 29, further boosting investor interest and capital inflow.

Bull Pennant Breakout

BNB’s rise toward $387 appears to be part of a bullish breakout emerging out of its previous bull pennant range. However, caution is advised as BNB’s 4-hour relative strength index (RSI) has risen above 70, indicating an overbought area. In other words, the cryptocurrency risks undergoing a price retracement.

If BNB enters an overbought correction cycle, its primary downside target looks to be its 0.326 Fibonacci retracement line at $364, down 4.5% from current price levels by the end of February. Conversely, a decisive break above the $387 resistance level could push BNB’s price toward $400.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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