Technical Analysis and Market Entry: Binance Coin Moving within Bearish Pennant, Breakout Eyed

Binance Coin
  • The Binance Coin price has suffered massively over the last fourteen weeks, remaining within a bearish trend.
  • BNB/USDT price action has formed a bearish pennant over the last five sessions, vulnerable to a breakout south.

BNB/USD: Recent Price Behavior

Binance Coin has been within the firm control of the sellers for going on fourteen weeks now. The trend remains stubbornly to the downside, with a lack of signage in that changing anytime soon. BNB/USDT has dropped as much as 64% within the noted period, falling from heights of $39, which was the all-time high. The price is now trading at the lowest levels seen since March when BNB bulls were driving aggressively to the north. 

BNB/USDT initially from the start of 2019 had been on such a promising bull run. The price was trading down at $5, at the beginning of the year. It gained well over 200% in its trend to the north, before completely losing momentum. There was a critical ascending trend line of support, which had been providing needed support for the bulls in their move higher. The support had been active between March to August before the bears managed to force a breakout.

A breakout and retest were observed of the trend line, which was a trigger for the bears to kick start the heavy selling pressure. During the current trend to the south, there have been several consolidation periods forming bearish pennant structures. These provide signals for the sellers to further capitalize, as breakouts have come into play. Over the last five sessions, BNB/USDT has again been consolidating; as a result, another bearish pennant has formed. 

BNB/USDT daily chart.

Trade Recommendation

Given the above-described bearish pennant pattern, further moves to the downside are still eyed. The lower supporting trend line of the structure is tracking at $15.10; the upper acting trend line tracks at $15.90. It demonstrates just how narrow the current trading conditions are for Binance Coin; a breakout is imminent. The technical pattern is another indication that the sellers are not yet finished.

In terms of targets to the downside; $14.00, $11.85 and then $9.50. All of which are on the anticipation of the pennant breakout. Entry would be around the current market price at the time of writing. Stops to be placed just above the pennant pattern at $16.80, leaving some room in case of short-lived wicks to the upside.

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.