Binance Coin’s meteoric rise over the past 4 weeks could be about to end, as cracks begin to appear in the 4-Hour price performance. Could this be the start of a long-awaited correction? Let’s take a closer look.
Binance Coin (BNB): The Ascending Channel Breakout
Looking at a broad view of the 4-hour BNB/USDT chart, we can see that the price has been tracking incredibly well inside an ascending channel since May 10, between two uptrending parallel levels (yellow lines).
Whilst inside this channel, BNB’s price 00 managed to climb over 95% to a new all-time high at $35.54 in just 15 days.
Looking at it now however, we can see that the asset has broken bearish out of the channel after increased selling pressure during the Asian trading session today managed to push BNB into bearish territory.
Other worrying signals can also be seen on the MACD indicator, as the 12-MA looks to diverge beneath the signal line for the first time since May 12.
Bullish traders are currently attempting to break back into the channel, and have found new resistance at the previous channel support line. These ‘throwbacks’ are typical during channel breakouts and are usually unsuccessful. Once the price ricochets off the new resistance, it’s likely to begin unraveling in value as the trend starts to reverse.
The Descending Triangle
Looking at the 4-Hour BNB/USDT chart more closely, we can see that the price is also tracking inside a bearish descending triangle between flat base support and a downtrending resistance level.
The base support for this pattern sits between the $32.81 and $32.45 levels, which also ties in nicely with the 0.382 Fibonacci level.
This key Fibonacci level has helped prop up BNB’s price above $32.45 on several occasions over the last 3 days and will be a critical level for bullish traders to defend. Should this level fail, then the descending triangle pattern will complete and bear traders will likely take control over the asset.
If this happens, the 0.618 Fibonacci level below at the psychological $30 mark should provide good support in the short-term, and could allow BNB to recover from the reversal early.
If the $30 support breaks, however, then it’s likely that we’ll see BNB extend its losses towards the $28 level.
A Point To Note
It is worth remembering, however, that Binance Coin is an especially strong performing cryptocurrency, even during a falling market.
With the centralized Binance exchange looking to add margin trading soon, as well as launch more IEOs on its hugely popular Launchpad platform, the coin is unlikely to stay down for very long.
Trade Bitcoin (BTC), Litecoin (LTC) and other cryptocurrencies on online Bitcoin forex broker platform evolve.markets.
The views and opinions of the writer should not be misconstrued as financial advice. For disclosure, the writer holds Bitcoin at the time of writing.
Images courtesy of Shutterstock, Tradingview.com
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