Binance has broken to the upside of its previous downtrend pattern, signaling that a bullish reversal is due. Price has been trending higher on its 4-hour time frame but is showing a pullback on its short-term charts.
Stochastic is indicating overbought conditions on its 1-hour time frame so price could be in for a dip from here. The moving averages are also edging closer together to signal a pickup in selling pressure. If the downward crossover materializes, Binance could be in for a steeper fall.
Binance is an up and coming Chinese exchange but it has its own cryptocurrency. These tokens were created by an Ethereum smart contract some time ago and a total of 80m BNB coins is kept in reserve, all of which belong to the team. A total of 200m coins were created initially so there are 120m BNB coins waiting to be traded.
However, the ban on ICO funding and the shutdown of bitcoin exchanges also threatens to put the existence of Binance at risk, although there is still some observable demand from other markets. A couple of weeks back, Binance addressed these concerns, citing:
“Regarding the recent announcement from China’s PBoC banning all ICOs, we are working around the clock on a solution that will fully satisfy the new regulations in China, while preserving and enhancing features that are valuable to our western community.”
This has led to an upside breakout of the formerly bearish continuation pattern or pennant seen on the daily chart. Volume has considerably ticked higher following this announcement, although some degree of profit-taking was seen when South Korea also made a move to ban ICO funding.
In any case, bitcoin has also been weakening across the board, including to its counterpart Binance. Risk appetite has improved in the past weeks on easing concerns about North Korea and a return in focus to U.S. tax cuts and central bank policy. A number of central banks like the Bank of Canada, Bank of England, and European Central Bank are shifting to either a more hawkish or less dovish bias so cryptocurrencies are taking the back seat.
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