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Analysis

Binance Coin [BNB]: Don’t overlook these crucial indicators

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Source: Canva


Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

As the dust seemingly settled in the altcoin market, Binance Coin’s (BNB) price took shape within a bearish rising wedge (yellow). The end of this tight phase could result in a sharp swing in either direction.

With the price finally breaching the basis line (green) of the Bollinger Bands (BB), the buyers affirmed the gradual increase in their influence. But, with slightly weak indications on its technicals, the buyers need to negate the selling pressure on high volumes.

At press time, BNB was trading at $315.9, down by 2.97% in the last 24 hours. 

BNB Daily Chart

Source: TradingView, BNB/USDT

After bouncing back from the $268-support, BNB formed a rising wedge on its 4-hour chart. Now, there are two possibilities from this. Should the pattern function as a continuation of the previous downtrend, a further drawdown will be likely. A bearish outcome would expose the alt to a potential test of the Point of Control (POC, red) before any further pulldown.

To affirm this outcome, bears would need to enforce a close below the lower trendline of the wedge. With the BB looking to curb its current volatility, the potential decline might enter a squeeze phase in the coming sessions.

On the other hand, there are chances for the buyers to step in at the $307-support. This trajectory may be possible due to the alt’s recent streak of higher troughs. An upwards breakout would position BNB toward the $357-level in the days to come. A close above $326 would boost the probability of this upswing.

Rationale

Source: TradingView, BNB/USDT

The 4-hour RSI was denied a break above its half-line as it plunged lower towards the 44-zone. Furthermore, the -DI moved parallel with the +DI line and suggested that a bearish trend is still active.

Also, capital inflows took a hit while the CMF struggled to cross the zero-mark. However, any bounce-back from its current support range would confirm a bullish divergence.

Conclusion

Looking at its press time setup, BNB tilted slightly towards the selling market. The investors should watch out for a break outside of the current pattern to make any potential calls. Finally, keeping an eye on Bitcoin’s movement and the broader sentiment would be important to complement the aforementioned analysis.

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With a background in financial analysis and reporting, Yash is a full-time journalist at AMBCrypto. He has a keen interest in blockchain technology, with a primary focus on technical analysis of cryptocurrencies.

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Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.