Technical Analysis and Market Entry: Binance Coin (BNB/USDT) – Another 90% Move Higher Imminent

  • Binance Coin (BNB) is back within a bullish trend after a brief period of consolidation, having gained over 90% in the last three weeks.
  • BNB/USDT price action has formed a bullish pennant pattern, subject to a potential breakout to the upside.

Binance Coin over the last few sessions has managed to find some upside momentum again, after a period of consolidation. BNB/USDT was pumping up aggressively from 10th May, having advanced as much as 90% up to the recent all-time-high on 25th May. The price rallied from $18 up to $35, before then falling into a sideways range.

During the most recent solid push higher, the bulls were supported by an ascending trend line within the above-noted period. BNB/USDT after printing the new heights cooled and breached the support to the downside. A breakout and retest have been observed; however, the bearish momentum did not gather enough pace.

BNB/USDT daily chart.

Bullish Pennant

Despite the technical trend line break, Binance Coin has formed a bullish pennant pattern. The structure has come into play, given the easing from the noted high. Price action is beginning to narrow within the confinements of the pennant, subject to a breakout. The pole is the bull run produced 10-25th May, as earlier described.

If the structure plays out to the textbook, in theory, another big wave of buying pressure could very soon be observed. The pole of the pennant equates to a move of 90%; should the bulls force a breakout to the upside, then a similar jump could then be seen. In the last daily candlestick, the price at the time of writing has been testing the upper acting trend line for a break.

Key Technical Levels

To the upside, eyes are on the aforementioned upper acting trend line of the pennant. It is currently tracking around $34.35, and should the bulls expose this, then further buying may quickly be seen. There is a supply zone seen just above, running from $34.35-35.35 price range, where the all-time-high was printed.

In terms of support, there is a lower acting trend line, which tracks at $31.45. In proximity to the pennant, just below sees an area of demand tracking from $31.35-$30.50 comes into play. If this fails to hold, a strong wave of buying pressure may come into play. The next major area of support is not seen until the $24-$22 price range, having last trading down here on 17th May.

Trade Recommendation

Given the described pennant structure, which is being respected, taking a buy position looks very much attractive. An entry within proximity to the current price, anywhere from $31-$34 range, looks attractive. The first target area of interest would be a break into the psychological $40 price territory.

All targets north of the all-time-high are the total unknown, but if the crucial current support areas continue to hold, then further moves north are likely. A second target would be for another 90% from a breakout, which should see BNB/USDT up at the heights of $60. In terms of a stop, this to be placed below the pennant and acting demand zone, $29.50.

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.

Author:
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.