Binance Coin Attempts to Hold on to Crucial Support

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The Binance Coin (BNB) price recently broke out above a descending resistance line in place since November 14, 2019.



A breakout above a long-term resistance line is often a sign that the price could begin an upward move. This was outlined by PoxyXBT, a well-known trader who tweeted out a BNB price chart while stating that, after the retest of the resistance line, the market outlook for BNB has turned bullish.

Double Bottom for Binance Coin

The BNB price has been on a downward trend since April 19, 2019, when the price reached an all-time high of 48,134 satoshis.

On September 25, the price fell to a low of 18,050 satoshis and began an upward move that was unsuccessful. Afterwards, the price decreased and made a double bottom on December 21.

Besides being a bullish reversal pattern, the double bottom was combined with bullish divergence in the three-day RSI, which was recording oversold values. The three-day RSI has never recorded bullish divergence until now. However, it was oversold in the beginning of December 2018, prior to initiating an upward move of 260 percent and reaching the aforementioned all-time high.

However, the price is not at a significant support area, the closest one being at 15,000 satoshis. All things considered, the long-term outlook for BNB suggests that a bullish reversal might begin soon.

Current Breakout

The BNB price broke out above a descending resistance line on December 29. However, the price failed to even retest the previous support level of 20,000 satoshis. Rather, the price created two long upper wicks at 19,500 satoshis and is currently in the process of creating a daily bearish engulfing candlestick.

In addition, the price is trading below the 50- and 100-day moving averages (MAs), which have made a bearish cross and are offering very close resistance to the price.

The daily outlook is bearish and negates some of the positive signs from the long-term outlook. What seemed like a double bottom looks more like a full retracement after a failed upward move, which is a bearish development.

The short-term bearishness is even more pronounced in lower time-frames. The double top with long upper wicks was combined with bearish divergence in the RSI. A price close below the red line would confirm the pattern and indicate that the BNB price is heading lower.

To conclude, the long-term outlook for BNB reveals a possible reversal, but lower time-frames suggest that the price will likely fail to initiate one. The 18,000 satoshi support level can be used as a gauge for the future outlook, since the bullish possibility remains intact as long as the price is trading above this level. Therefore, this makes it a very suitable level to place a stop loss. A price decrease below it would likely cause the price to reach 15,000 satoshis.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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