Technical Analysis and Market Entry: Binance Coin (BNB/USDT) Eyes Another Drop Before More Big Bull Buying 

  • Binance Coin (BNB) is within the control of market bears following the all-time high print on 22nd June.
  • BNB/USDT may be subject to some further cooling before significant buying returns.

BNB: Recent Price Behavior

Binance Coin has been under pressure since the all-time high print up at $39.66. BNB/USDT has dropped over 16%, as market participants pile in on taken profits. The price has recently dropped down to its lowest level in ten days, with still room for further potential downside.

BNB Dominance

BNB/USDT had been a large out-performer compared to the rest of the market. The run higher initially started with intentions of just a recovery, claiming back the losses of 2018. Last year’s low put the price down at the $4 mark, after trading as high as $18 in June 2018. In March of this year, the bulls managed to produce a full recovery, returning back to $18.

Since the price recovered the noted losses, it just carried on moving north at somewhat of an aggressive pace. BNB just kept on producing new all-time highs after each small dip in the price. In terms of the gains this year, BNB/USDT has rallied as much as 685%.

BNB/USDT daily chart.

Bull Flag Structure Complete

Back in May the upside momentum largely picked up the pace, which formed a pole of a subsequent flag formation. Late in the month to early June, the price consolidated and constructed the flag pattern itself. The noted pole of the structure equated to around 30%, upon a breakout the price jumped some 27% before recently peaking at the new all-time high. The formation played out to the textbook, with the breakout and retest to then jump in somewhat equal measure to the pole.

Trade Recommendation

At the time of writing, BNB/USDT is testing a key near-term area of demand, which if broken, could open the door to another wave of selling. The zone runs from $35 down to $34, which recently helped the price between 19-20th June as a launch pad to the current all-time high. It is worthy of note that this area had previously served as supply earlier in June and late May.

In the session on 27th June, the bears did test this support, seeing a big daily wick below. Sellers could further capitalize on this potential vulnerability, given the warning already seen. Should a breakout come into play, BNB/USDT could be forced to make a return back down at the psychological $30 mark. The price last traded down here on 14th June; it is a known area for buyers.

A buy position would be attractive upon a pullback to the noted area of demand; it could provide a stronger move to come from the bulls. Upside targets upon entry would be at $30, $35 and $40; if the price can settle above the $40 area, then a longer-term hold would be attractive. Stops would be placed at $28 upon the noted entry, leaving enough breathing room below the demand zone.

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.