Crypto Update: Binance Coin’s 2018 Bull Run May Be Ending

The Binance Coin/Bitcoin pair (BNB/BTC) has risen by over 326% this year as it recently recorded an all-time high of 0.0026555. What’s more astonishing is that Binance Coin has managed to go against the cryptocurrency trend. While other popular coins such as Bitcoin, (BTC), Ethereum (ETH), Ripple (XRP) and Cardano (ADA) have taken a beating this year, BNB mightily swam against the current for about six months. Unfortunately, it now appears that BNB can go no further. After all, swimming against the current is exhausting.

In this article, we’ll reveal tell-tale signs that show how BNB may wash ashore bear county soon.

Binance Coin Bearish Reversal Patterns Hidden in Plain Sight

Looking at the daily chart alone, it would seem that BNB is in a healthy uptrend. It is currently pulling back from the all-time high of 0.0026555 but it is no big deal as pullbacks are healthy. Some would even recommend buying on dips.

However, it can be incredibly risky to buy on dips especially if the market has skyrocketed by more than $326% in half a year. All that goes up must eventually come down. For BNB, signs of a nosedive are everywhere.

Triple Top on the Hourly Chart

A quick look at the hourly chart shows that Binance Coin/Bitcoin has broken out of a triple top reversal pattern. This structure is a reliable reversal pattern as it confirms a resistance area not once but twice.

In the case of BNB, its inability to mount a significant rally above 0.00262 was a sign of weakness. This weakness was further confirmed when the pair broke below 0.0024 support and then turned the support into firm resistance.

Hourly chart of BNB/BTC

Rising Wedge on the Weekly Chart

In addition to the triple top structure, the pair is forming a large rising wedge pattern on the weekly chart. This pattern is often seen in a downtrend but it can also be a catalyst to a reversal. However, keep in mind that a rising wedge only hints at a potential for a bearish move. This is why it is important to look for other evidence to support the analysis. We have more of that below.

Weekly chart of BNB/BTC

Exhaustion From Three Bullish Pennants

BNB/BTC is exhausted after breaking out from three bullish pennants. The size of each pennant tells you the story. As you can see below, the first pennant is larger than the second flag both in terms of breakout rally and consolidation. The same applies to the second and the third flag.

As the size shrinks, volume also shrinks. In other words, fewer and fewer participants are buying positions after each breakout yet the market manages to rise. This is because those who bought at the bottom constrict the supply believing that the market will continue to rise.

In most cases, the ascent ends after the third breakout. At this point, the market has climbed so high that those who bought the bottom are ready to take profits. It appears that this is the case for BNB/BTC. The market has grown by so much in so little time that it is only a matter of time before early investors dump positions.

Daily chart of BNB/BTC

Bottom Line

BNB/BTC has performed stellarly this year, rewarding investors by as much 326% growth in investments. However, writings on the wall warn of an impending downfall. The triple top on the hourly chart, the rising wedge on the weekly chart, and the three bullish pennants all suggest that BNB’s impressive bull run has come to an end.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.