Disclaimer: The results of the following analysis are the sole opinions of the author and should not be construed as investment advice
Since Bitcoin could not exceed its price cap of USD 50,000, the altcoin market had a quiet week with a few exceptions. Binance Coin, like most of its counterparts, has had to deal with selling pressures lately. A descending channel traced the BNB’s depreciation, which is characterized by lower highs and lower lows.
Even so, the larger upward trend that the Alt seemed to notice could only inspire a move north. At the time of writing, BNB was valued at $ 474, up 2% over the past 24 hours.
Binance Coin 4-hour chart
The BNB’s downward channel, which emerged after the price hit a swing high of $ 517.7, has been active for a week. Since the pattern was created on the basis of a strong uptrend, it can be assumed that the setup will develop as a continuation pattern. An impulsive move above the BNB’s last swing high of $ 481.1 would increase the chances of a rebound, while a setback between $ 487 and $ 480 would also benefit the bulls.
Once the breakout is complete, targets can be set at $ 540. This would mean a jump of 13% compared to BNB’s press time price.
If a hike above the upper trendline is rejected and the BNB’s channel falls near $ 437.6, there is a risk of further losses as the move would welcome short sellers.
The RSI noted an important development. The index, which is traded within its own downward channel, had a breakout at the time of going to press. This meant the RSI was able to continue on its rise – something that could encourage buying in the market.
The Awesome Oscillator put up a series of green bars and saw a comeback above its half-line. This indicated that another buy signal was in sight.
Eventually the Directional Movement Index also approached a bullish crossover between the + DI and -DI lines. However, the ADX value of 18 has to pick up if the BNB wants to maintain its momentum.
Although Binance Coin appeared prepared for a down-channel breakout, it is still too early to demand a bullish result. The 24 hour trading volumes and the ADX need to be carefully monitored in the future as this would give more insight into a price spike.
Traders can only play safe and long BNB positions when the price closes above $ 481 and pegs their take profits at $ 540.