Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Since breaching the $35-mark on 28 December 2020, Binance Coin has maintained its consolidation above its support line on the charts, registering an all-time high of $47.23 on 19 January. Following the same, Binance Coin can be observed to be adhering to a period of consolidation, with there likely to be more room for another leg down.
Binance Coin 4-hour chart
Source: BNB/USD on TradingView
There a couple of factors associated with Binance Coin that need to be monitored at the moment. First of all, the crypto-asset has a consistent ascending support level that will possibly assist BNB during the period of drawdowns. Secondly, over the short-term, BNB seemed to be following an ascending channel bearing bearish sentiment. With the 50-Moving Average acting as an overhead resistance on the charts, a drop under $40 looked likely over the next 24-48 hours.
The depleting trading volume was another indication of a bearish divergence, with the price rising within the pattern. The market’s traders may look at this from a shorting perspective as the immediate support at $38.5 might be tested going forward.
Market Rationale
Source: BNB/USD on Trading View
Market indicators were projecting a collective bearish narrative with the RSI slowly dropping down on the charts. The selling pressure was beginning to pick up more momentum too. On the question of momentum, the Awesome Oscillator or AO highlighted a neutral trend. At press time, the momentum was radically shifting towards the bears.
Finally, the MACD also completed a bearish crossover on the charts, with the orange line hovering over the blue line at press time.
Important Levels to watch out for
Resistance: $47, $43.5
Support: $40, $38.5 $35
Entry for Short Position: $42
Stop Loss: $43.5
Take Profit: $38-$38.5
Risk/Reward Ratio: 2.33x
Conclusion
For Binance Coin, the trend is necessarily bullish in the long-term, but corrections are likely in the near-term. The crypto-asset should keep above the ascending support line, otherwise, the market’s bears may take further advantage.
