Binance Coin Price Analysis: BNB Profit-Taking Kicks In as Binance’s Business Continues to Defy Cryto Winter

  • BNB/BTC produces a double-top pattern formation, leaving the door open to further downside pressure.
  • Binance CFO confirms that the organization is still profitable, despite the ‘crypto winter’.

Binance Coin Price Behavior

The BNB token has been outperforming many of its peers over the past few weeks. Since the week commencing 3rd December, BNB/USDT has rallied a chunky 115%. The price recently pushed to its highest levels seen since June 2018, peaking around $0.0027000. Given the prolonged consecutive run north, it isn’t too surprising to see a cooling.

Observing where the price peaked earlier in the week on 12th February, BNB/USDT produced somewhat of a double-top formation. The high was very much in proximity to the top on 17th June 2018. Playing out to the textbook, the market bears piled in after reaching these heights again, as investors took profits following the strong run north from December 2018. As a result, the price is running at its third consecutive session in the red.

Binance Remains Profitable Despite Crypto Winter

The CFO of Binance Wei Zhou was recently speaking in an interview with CBNC, where he commented on the company’s position within the current market downturn. Zhou said, “To date, even in this bear market, we still run a profitable business”. Binance is known to not publicly disclose its financial performance; however, in the past, it has provided several hints that would suggest the business is financially secure.

Back in the summer of 2018, Binance CEO and Founder Changpeng Zhao (“CZ”) disclosed that the exchange’s revenue for the first half of 2018 was roughly $300 million. He did additionally project at the time that net profit would hit between $500 million to $1 billion by the year’s end.

It has been estimated that Binance achieved $446 million in profit last year. It has also been estimated that the Binance ICO offering back in 2017 saw the company raise $15 million for 100 million Binance Coin (BNB) out of 200 million in total supply. Additionally, as part of maintaining its coin, Binance uses 20% of its net profits to buy back BNB and eventually destroy 100 million BNB tokens, according to the whitepaper.

Technical Review – BNB

BNB/BTC daily chart.

Given the recent price developments, there are a couple of bearish confluences to back the bias south. A bull run occurred in such a short space of time, resulting in the price entering overbought territory. Elsewhere, as earlier detailed, the BNB/BTC is playing to the textbook after the double-top formation. The downside pressure could soon drastically pick up the pace, with eyes looking down towards the possible neckline of the technical pattern.

In terms of support, the range of $0.0014000-$0.0012000, which is the potential neckline of comfort, is part of the double-top textbook pattern. A failure of this area holding could see a fall down to 0.0008410, the low of March 2018.

BNB/USDT daily chart.

Looking at BNB/USDT, the bulls ran into massive supply heading into the big psychological $10.00 mark. The price has not comfortably traded above this level since October 2018. This time last week, BNB/USDT managed to break out to the upside from an ascending wedge pattern. There is room for a potential retest of this level, completing the breakout and retest. Support will be sought just on top of the breached pattern, tracking around $7.4000.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.