Technical Analysis and Market Entry: BNB Bulls Fail To Take Advantage; Punishment Coming?

Binance Coin
  • Binance Coin is back within the control of the market bears, following a five consecutive week run higher.
  • BNB/USDT has formed a deadly evening star via the weekly chart view, signalling a change in trend. 

BNB/USDT: Recent Price Behaviour 

The Binance Coin price has been on the decline for going on two weeks, following such a promising start to 2020. BNB/USDT rallied for five consecutive weeks from the commence of the year. The run to the north was the most straight weekly run of gains observed since October-November 2019. 

BNB was able to gain a whopping 95%, from trading down at depressed levels of $14.00 to jumping up to heights of $27. The price hit its highest standards that had been observed since late August 2019, before running out of upside momentum. It should not come as too much of a surprise, given the price rallied so firmly within such a short space of time.

Weekly Chart View 

Market bulls, as mentioned above, put on a stunning recovery consecutively from the start of 2020. However, they were unable to carry through the momentum, as a result of some touted profit-taking. The prior week close so the formation of a bearish evening star candlestick, which typically indicates an incoming change in trend. 

The bearish candlestick pattern has been followed up within another weekly closure in the red, as seen at the time of writing. Should BNB/USDT bears force a closure below last week’s close, then this would be a further confirmation of downside to come. Give this noted technical behaviour; it does make Binance Coin at risk to a reversal of 2020 gains. 

BNB/USDT weekly chart.

4-Hour Chart View

Price action via the 4-hour chart view has formed a bearish flag structure, which is subject to a potential breakout south. The formation of this began to take shape on 19 February, following the steep falling during that session. It is a form of consolidation, following the tough beating that has been in play over the last two weeks. Should the bears manage to capitalize on this, then another wave of pressure south will likely follow. 

Trade Recommendation

Given the weekly chart view spotting a bearish evening star formation, allied with the 4-hour flag structure, further moves to the south are eyed. An entry around the current market price, with BNB/USDT moving within the flag pattern. Targets desirable at; $19.55, $19.00 and then $18.00. Stops would be placed at $24.60. 

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.

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.