Technical Analysis and Market Entry: The Binance Coin (BNB) Bulls are Laying the Foundations for a Breakout
- Binance Coin (BNB) bulls are laying the foundation for a rebound.
- BNB/USDT price action is well supported and has formed a bullish flag structure.
BNB/USDT: Recent Price Behavior
Binance Coin has been attempting to stage a rebound and escape from a stubborn bearish trend. Since the price printed an all-time high up at $39, it has fallen victim to a major correction. The drop equates to some 37%, retreating back to the lowest levels seen since 18 May.
During the bull run that led BNB to the earlier noted all-time high, price action was very much supported by a key ascending trend line. It was a reassuring area of comfort for buyers, at the time a key part in guiding the price north. The support was active and in play from 19 May, when BNB started to stabilize within the $30 price territory.
On 10 July, during the market fall on the back of the all-time high print, the trend line was breached. Momentum to the downside was followed through, which notably picked up pace after the retest and rejection of trying to break back above. BNB/USDT was forced to retreat to a secondary trend line of support, which was tracking below.
The above detailed secondary ascending trend line has been running to the upside since the back-end of March. On each occasion that BNB has come into contact with the support, a decent push north has been observed. The most recent, which occurred on 17 July, had jumped some 39% over five sessions to then be stopped short.
A glimmer of Hope for the Bulls
Since the earlier noted price rejection, the price tumbled further, retreating again to the secondary ascending trend line of support. During the noted fall in price action, BNB/USDT has formed a bullish flag structure. Given the observed support comforting the price, it does lay the foundations for the bulls to capitalize.
Weiss Ratings, a private company which conducts research and analysis for consumers and business professionals, recently tweeted expressing their opinion on Binance Coin and why it has been so successful in 2019.
“Because BNB is centralized, its creators are constantly creating new use cases for it, which increases its market cap and keeps the asset going. BNB is successful BECAUSE it’s centralized. Interesting.”
A buy position from the current price areas is looking attractive, given the reassuring ascending trend line of support and the bull flag. The price is at the time of writing penetrating the upper acting resistance of the flag, subject to an imminent breakout. Targets to the upside would be $30, $34 (breached prior trend line of support) and then $36. Stops would be placed just below the current acting supporting ascending trend line at $24.
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.