Binance Coin was at a critical juncture after the market’s most widespread cryptocurrency sell-off. The large-cap alt had a single chance to avoid another drastic sell-off if its price dropped below $320. At the time of writing, BNB was trading at $334, down 12% over the last 24 hours.

Binance Coin daily period

The region between $340 and $320 was extremely significant on the Binance Coin daily chart. In addition to housing a daily demand zone (areas where buying activity outweighs selling activity), the area anchored the ‘neckline’ of a larger head and shoulders pattern.

Head and shoulders patterns are considered bearish setups. They are seen after the price forms a peak and then descends to the base of the previous move. A breakdown occurs when the price fails to stay above the base or ‘neckline’.

In BNB’s situation, a crash would put the market at risk of another 20% drop. The Visible Range Profile, which highlights strong support/resistance levels through historical trades, showed that BNB’s next strong defensive option was only between $260 and $270. Other areas of support such as $300 and $ $280, were relatively weaker and the chances of such points holding during extreme FUD are low.

The daily RSI deserves a mention as the index was close to the oversold zone. However, the reading is often discounted when there is active selling from the broader market. In such situations, individual markets recover only when the driving force (Bitcoin) activates the risk.

indicators

Other indicators such as the Directional Movement Index and MACD showed a clear bearish preference. However, it was important to note that the Average Directional Index was still trading below 25 and volatility was still not extremely high. So, if Bitcoin can sustain its value above $35K, there was a chance that BNB could maintain its current support zone.

Conclusion

Binance Coin was on track for a return of $260 to $270. The price was trading on the neckline of a head and shoulders pattern and a breakout was expected. If an immediate BTC rally occurs, there was an inside chance that BNB could hold $320. In either case, selling BNB below its immediate support zone was a more ideal trade than any long bet at the time.

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