Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
As the altcoin market reflected a shift in momentum toward the buyers, Binance Coin (BNB) flipped its two-month trendline resistance to support. The alt has been rangebound within the constraints of its reversal pattern for over a month now.
With the price jumping the basis line (green) of the Bollinger Bands (BB), the buyers kept near-term control. A sustained position above the basis line could aid the buyers to invalidate the potential bearish inclinations.
At press time, BNB was trading at $269.6, up by 5.59% in the last 24 hours.
BNB Daily Chart
Since losing the $320-$326 range in early May, BNB saw a splurge in the selling pressure as it continued its southbound journey. As a result, it poked its 16-month low on 18 June. Since then, the alt transposed into an up-channel on its daily chart.
Should the pattern reignite any reversal tendencies, a short-term drawdown could occur. A bearish outcome would expose the alt to a potential test of the lower trendline of the up-channel. Any decline below this mark could cause a retest of the $216-$219 range.
To affirm this outcome, bears would need to enforce a close below the basis line of the BB. Any rebound from the basis line of BB could lead to an extended up-channel trajectory.
Should the buyers continue to heighten their pressure, the alt would strive to close above the 38.2% Fibonacci resistance in the coming sessions. A compelling close above the $271 zone would boost the probability of an upswing toward the 50% Fibonacci level.
The daily Relative Strength Index (RSI) exhibited a slight bullish edge while reversing from its trendline resistance. This trajectory has affirmed a bearish divergence with price.
Similarly, the On-Balance Volume’s (OBV) lower peaks reiterated a bearish divergence in this timeframe. However, the ADX depicted a substantially weak directional trend for BNB.
Given the bearish divergences on the indicators and the up-channel setup, BNB could see a slight setback. But a close above the 38.2% Fibonacci level would disregard the bearish inclinations. In either case, the targets would remain the same as discussed.
Finally, keeping an eye on Bitcoin’s movement and the broader sentiment would be important to complement the aforementioned analysis.
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