Binance Coin was witnessing a recovery on the hourly charts after a double top pattern dragged prices by over 10%. A support region of $390-395 managed to trim losses and spotlight now fell on the crucial resistance zone. Closing above this would allow bulls to assume near-term control of the market and negate risks of an extended drawdown.
At the time of writing, Binance Coin traded at $403, down by 4% over the last 24 hours.
Binance Coin Hourly Chart
Source: BNB/USD, TradingView
Two highs formed at $435 gave rise to a double top pattern and sellers were quick to capitalize on this bearish setup. Losses amounted to over 10% when calculated from the second peak formed at $435 to a defensive line of $390, although a single candlewick did drop as low as $386.06.
In response, buyers attempted to lift prices from a support region of $390-395 but their efforts could be quashed at the upper ceiling of $406-$410. If an upwards breakout is denied, BNB would need to defend the aforementioned support once again from selling pressure. A worst-case outcome could see BNB go as low as $375- which is another 6% drop from its press time level.
Reasoning
There was some presence of buying pressure on BNB’s indicators. Awesome Oscillator registered a series of green bars, while the MACD was close to a bullish crossover. A rise above each of their respective half-lines would even present a buy signal.
Conversely, the RSI still traded in bearish territory, which pointed to another leg in the oversold zone before reversing. It’s also noteworthy to mentioned that each of these indicators were to yet to flash positive signs on the 4-hour chart, which meant that BNB’s near-term outlook was still unfavorable despite some buying momentum noted in the market.
Conclusion
The BNB market was building up to a reversal, but bulls were not out of the woods just yet. Prices would need to close above $406-$410 to avoid a retest of $390, from where an extended decline was possible. Meanwhile, the safest bet for traders was to wait for further developments before entering a long or short position.
