Technical Analysis and Market Entry: Binance Coin (BNB/USDT)

  • Binance Coin is further storming ahead on Thursday, trading up with decent gains of 6%.
  • Long opportunities are eyed given the current upside momentum and strong areas of support to guide a firmer rally. 

Binance Coin (BNB) at the time of writing in the early European hours was trading firmly in the green, with gains of over 6%. BNB/USDT is trading up at its highest level seen since 15% January as the market bulls turn it up a gear. There is a decent area of supply around the $20.00 price territory, which is the next significant barrier ahead of greater potential upside.

Big Near-Term Resistance Broken

Throughout April so far BNB has observed several rejections at the noted resistance. The zone can be seen running from around $19.75 up to $21.00, with a large part of that friction heading into $20.00. As seen via the daily chart view, the mentioned $19.75 level was capping upside from 2nd April, causing several price rejections on the attempt of entry.

Given the six daily rejections, the barrier built up some strength in not allowing the price to break through. The push above seen on 18th April invited a strong wave of bullish pressure, i.e. simply a momentum breakout. BNB/USDT will need to force a daily closure above the $19.75 area for a decent chance to run further higher.

Respecting Key Zones

BNB/USDT daily chart.

The price has been on a strong run to the upside since February 2019, and this is without a doubt a steady path of recovery for BNB. On this journey higher, BNB/USDT has respected and been guided by both supply and demand zones. These noted areas were part of the 2018 rise and decline, having formed in what still is its young age trading.

Let’s a look at some of the zones to the downside that the bulls have conquered on its way north that will now act as support. Below the $20.00 region, eyes are on $17-$16; the price had broken above this area to test $20.00, and then retest the lower zone before further committed upside. See the chart for a breakdown of how the price is respecting the supply and demand regions.

Looking further south in case of a loss in bullish momentum, the next zone of support would be $15-$14. The price last traded here between the 8-22nd March, ahead of further storming higher. Then lastly, as a further net of safety, support can be observed tracking from the $12-$11 range. BNB/USDT traded down here at the start of March, before bursting to the upside.

Given the pace of upside momentum, we must look at the next target areas for the bulls. Eyes are on $23-$24 price range, having last trade up at these heights on 15th January. It had capped upside here between 6th -15th January, before then entering an aggressive bearish trend. Should the price manage to breakdown this area, then the all-time-high will be back in sight at $25.00.

Weekly Chart View

BNB/USDT weekly chart.

Looking via the weekly chart view, BNB/USDT has been rallying for the past 12 consecutive weeks. It has gained a chunky 210% within this period. As can be viewed on the chart, momentum picked up pace as the price smashed through big Fibonacci levels; 38.2%, 50% and the 61.8%. The door is left wide open for the price to push to a new all-time-high and beyond.

Trade Recommendation

In the near-term, given how the price has been responding to these critical zones, the expectation is for this to continue. Eyes are on a near-term daily closure above the $20.00 level, to then wait for a retest to the downside of this region. Once a retest has been completed, longs would be attractive running up to $23-$24 as the first point of target, with a second target at $25. Stops after the $20 retest to be placed at $18.50, enough cushion below the noted zone. It would only be valid as mentioned upon a daily closure and retest of $20.

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.