Binance Coin traders can reap benefits by making this move

The global cryptocurrency started the week with a strong bullish statement as Bitcoin jumped by 10% to $38,000. While most alts were quick to grab onto positive sentiment and register hikes off their own, Binance Coin seemed rather unimpressed by such strong signals. Even though BNB’s value rose by 5.3% to $317.3 over the last 24 hours, its percentage gains were fairly low when compared to the other top 10 coins by market cap.

BNB 4-hour chart 

Source: BNB/USD, TradingView

BNB has been on a steady uptrend since its price touched a low of $255 on 20 July. The rise saw prices break above their 23.6% ($277.6) and 38.2% ($310.09) Fibonacci Extension levels on the back of buying pressure although the last session did register a red candle. The next target now lay at the 50% Fibonacci Extension around $336 but prices could take a step back before making the next push.

Reasoning

Stochastic RSI formed two lower peaks and formed a bearish divergence with respect to BNB’s price action. The fact that RSI also traded in the overbought region signaled the possibility of an incoming dip. In such a case, focus would shift to a defensive zone of $290-310 which coincided with the 20 (red) and 200 (green) Simple Moving Average lines.

Maintaining above zone level would allow for a bullish outcome moving forward, whereas a breakdown could trigger a retracement all the way towards the $277-mark. The Aroon up inched lower towards the Aroon down as some selling pressure trickled into the market. However, Awesome Oscillator seemed to disregard this and continued to rise above the half-line- an indication of rising buying pressure.

Conclusion 

BNB flashed rather haphazard signals with respect to its short-term trajectory. Since the Stochastic RSI did flash overbought conditions in the market, a minor correction could follow, and focus would shift to a defensive zone between $290-310. Long trades can be initiated within this zone and take-profit can be set at $336- which would reflect gains between 10-12%. However, this setup does involve an element of risk as a sharper retracement was also on the cards in case of a close below $290.