Technical Analysis and Market Entry: Binance Coin Moving within a Bearish Pennant, Subject to a Breakout South
- Binance Coin is consolidating, after a brutal bout of selling pressure in the second half of November.
- BNB/USDT is moving within a bearish pennant structure, subject to a potential breakout south.
BNB/USDT: Recent Price Behaviour
Binance Coin is back to moving within consolidation mode, following some harsh selling that occurred in the second half of November. The price dropped a chunky 35% between from heights of $22 down to $14, which occurred from 13-22 November. In terms of the decline, it came following a grind to the upside through October. However, during this gradual push north, it formed a bearish flag pattern, which the sellers managed to capitalize on.
The price is now being forced to trade back down at the lowest levels seen in three months. Sellers had maintained control of BNB since late June when the trend south resumed. It came after such an initial strong start to 2019, having rallied some 600%. BNB/USDT achieved an all-time high up at $39 before the profit-taking came into play. The market has been within a bearish trend since rallies continue to be sold by the bears.
Since the above-noted all-time high print, the price has fallen some 65%. The price has recently bottomed out down at $13.85, which is a weekly support level has been holding the price for going on three weeks. It could be deemed as a potential double bottom, with the first produced on the week of 23 September and the second on 18 November. Should this play out to the textbook, then the neckline is eyed up at $21.50.
Bearish Pennant Structure
As detailed earlier, BNB/USDT price action is currently consolidating, with this behaviour it has seen the formation of a bearish pennant. The narrowing has been in play since 23 November, after falling earlier in the month. In terms of the pattern, it does suggest that Binance Coin is vulnerable to further downside pressure. The lower acting trend line of the pennant is tracking at $14.80, failure to hold should invite a stronger wave of selling.
Given the above-detailed pennant structure, another wave of selling is eyed. A short position from the current market price remains attractive — targets to the downside at $12.00, $11 and then $9.50. Stops to be placed just above the pennant at $16.55.
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.
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