The Binance Coin (BNB) price broke out from a descending resistance line but has yet to reclaim a crucial horizontal resistance level. Whether it is successful in doing so could determine the direction of the future trend.
Despite the ongoing crypto bear market, Binance had a relatively successful 2022, all things considered. Firstly, Binance’s CEO Changpeng Zhao catalyzed the downfall of the rival firm FTX by tweeting that he would sell all his FTT tokens.
This announcement sparked the bank run that was the first step in FTX’s downfall. Besides that, Binance also launched the Cristiano Ronaldo NFT collection and created a $1 billion industry recovery fund to invest in struggling crypto firms.
In more recent Binance news, the exchange is reportedly acquiring Gopax, one of the largest exchanges in South Korea. BNB, the native token of the BNB chain increased as a result of the news.
Binance Coin Price at Make-or-Break Level
The BNB price had fallen below a descending resistance line since reaching a high of $398.30 on Nov. 8. The downward movement led to a low of $220 on Dec. 17.
Afterward, the BNB price bounced and created a long lower wick (green icon), validating the $222 support area in the process. The ensuing upward movement caused the digital asset to break out from a descending resistance line on Jan. 5, 2022.
Despite the breakout, the Binance Coin price has yet to move above the $261 resistance area. Whether it does or gets rejected instead could determine the direction of the future trend. A successful breakout could lead to a rapid pump toward $318, while a rejection could lead to a fall and re-test of the $222 area.
As a result, the reaction to the $261 area will be crucial for the future Binance Coin price analysis.
Wave Count Shows Completed Correction
While the technical analysis from the daily chart gives an uncertain outlook, the six-hour chart is more bullish. The first reason for this is the possibility of a completed A-B-C correction since Nov. 2021. Waves A:C have a 1:1 ratio, which is common in such corrective structures.
Moreover, the ensuing overlap (red line) suggests that the BNB token downward movement is not impulsive.
The second reason is the movement above the $252 minor resistance area, which has now become support. The area could be re-tested in the next 24 hours. It also coincides with an ascending support line in place since Dec. 18.
As a result, the Binance coin price analysis can be considered bullish if the price does not close below this support area.
To conclude, the direction of the Binance Coin price trend will be determined by whether the price breaks out above $261 or breaks down below $252. Based on the current price action, a breakout seems slightly more likely.
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