Binance Coin’s (BNB) Increase Paves Way for Ecosystem Tokens to Rise

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In Brief
  • CAKE is following a descending resistance line.

  • BNB has broken out from a descending resistance line.

  • 1INCH has broken out from a descending wedge.

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In this article, Binance Coin (BNB) will be analyzed alongside two other tokens from its ecosystem, PancakeSwap (CAKE) and 1inch (1INCH).

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CAKE

CAKE has been decreasing since Aug 25, when it was rejected by the $26.85 resistance area. This is the 0.5 Fib retracement level and often acts as resistance after bounces.

Afterwards, the token found support at the 0.5 Fib retracement support level at $18 (white), which acted in a similar way as did the resistance one.

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While the token is still trading above support, technical indicators are neutral. 

The MACD, which is created by a combination of short- and long-term moving averages (MA) is right at the 0 line. This means that the short- and long-term trends are moving at the same pace.

Similarly, the RSI gives a reading of 50. The RSI is a momentum indicator that has readings between 0 and 100. The 50 line is the midpoint and is a sign of a neutral trend.

Chart By TradingView

The shorter-term 4-hour chart shows that CAKE is following a descending resistance line. As long as it is doing so, the short-term trend remains bearish. 

However, it is currently making its fourth breakout attempt. The line gets weaker with each one, so a breakout would be likely. If one occurs, the closest resistance would be at $22.9.

However, there are no clear signs that would confirm the direction of the trend.

Chart By TradingView

Highlights

  • CAKE is following a short-term descending resistance line.
  • It is trading above long-term support at $18.

BNB

BNB has been increasing alongside an ascending support line since May 23. The upward movement led to a high of $518.9 on Aug 26. 

However, the token was rejected by the 0.618 Fib retracement resistance level (red circle) at $511. This is a common Fib resistance level and cause a temporary trend reversal. 

The ensuing downward movement continued until BNB bounced at the support line once more on Sept 26 (green icon). This bounce further served to validate the ascending support line and increase its significance. 

In addition to this, technical indicators are bullish. The MACD is positive and increasing, meaning that the short-term trend is faster than the long-term one. Furthermore, the RSI is above 50, a sign of bullish momentum.

Chart By TradingView

The shorter-term six-hour chart shows that BNB has already broken out from a descending resistance line. This is in alignment with the readings from the daily time-frame. Therefore, it suggests that an attempt at breaking out above the $511 resistance area will occur.

Chart By TradingView

Highlights

  • BNB is following a long-term ascending support line.
  • It broke out from a short-term descending resistance line.

1INCH

1INCH has been decreasing inside a descending wedge since Sept 9. The wedge is considered a bullish pattern, meaning that the price is expected to break out from it in the majority of the cases. 

Unsurprisingly, 1INCH broke out on Oct 1 and proceeded to reach a high of $3.37(red icon). The ensuing rejection served to validate the $3.37 area as resistance, since the same one acted as the high on Sept 16. 

Afterwards, the descent took it to a low of $2.70, where it bounced (green icon). The bounce served to validate the $2.77 area as support, since the same one previously acted as resistance on Sept 22 and 27.

Therefore, until the token breaks out or down from either the resistance or support, the direction of the trend remains unclear.

Chart By TradingView

Highlights

  • 1INCH has broken out from a descending wedge.
  • There is support and resistance at $2.77 and $3.77, respectively.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.

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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 discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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