Technical Analysis and Market Entry: Binance Coin’s Bulls Suffer Potential Blow
- The Binance Coin (BNB) price has been stuck within a downward trend, with the bulls pushing for recovery.
- BNB/USDT breached a significant daily ascending trend line of support, allowing a strong wave of selling pressure.
- As noted in the previous BNB article, the price hit the desired target area of $26-$25 for required support.
BNB/USDT: Recent Price Behavior
The Binance Coin’s price was under heavy selling pressure since the late part of June. Sellers came into play with some force, following the price hitting another all-time high. On 22nd June BNB/USDT reached $39.66; however, these heights proved to be very much short-lived. The daily candlestick produced an evening star formation and BNB tumbled in the following sessions.
BNB/USDT dropped some 39% from the noted all-time high, down to $24, which was the lowest price seen since 17th May. The bears had effectively erased most of the May-June bull run following such solid momentum. Given the consistent run north, it perhaps shouldn’t come as too much of a surprise seeing a technical correction.
Target Safety Area Hit
Since the last BNB article, the desired downside target of $26-$25 has been achieved. The price pressure was in favor of the bears, where a breakout of the keynoted trend line was anticipated. BNB/USDT was forced to retreat to the noted safety zone, where it managed to catch the falling price and some strong buying interest.
BNB/USDT has managed to gain some 19% following the above-detailed zone coming into play to support the price. However, the bulls are having some difficulty trying to break down a former acting demand zone. The area runs from $29 up to $31; it had been supporting the price between 23rd May up until it was breached on 14th July.
The move is essentially playing out to the textbook, with the breakout and retest of the keynoted zone. At the time of writing, sellers are fighting off the bulls’ attempts to break back above. Should this area be successfully defended, then it could mean trouble for the price, allowing further selling back into the picture. The current daily candlestick is forming an evening star formation, which would indicate another move south to come.
Given the noticeable slowdown in upside with BNB heading into the $29-$31 price zone, a rejection does appear to be favorable. Should this be seen for BNB/USDT, then further downside zones will be eyed. In terms of targets; $26-25, $20 and then finally $18 are the main ones. Stops would be placed at $32. A short bias would be off the cards if the bulls can force a daily candle closure above the mentioned supply 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.
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