Binance Coin May Have A Break Soon, But Likely Short Lived - Price Analysis

  • Short term: a breakout from falling wedge could provide a trade...
  • Long term: ...but chart still looks like it needs to consolidate much more

Binance’s proprietary exchange token, Binance Coin (BNB), had a fantastic first half of 2019, gaining about 200% on its Bitcoin-paired chart. This translated into exceptional gains versus fiat (nearly 800%!), as Bitcoin’s own price rose about 400% during the same period. But since April, BNB has been correcting sharply and given back almost all of its 2019 gains.

Starting with a weekly BNB/BTC chart, we see that BNB has retraced through every level on the Fibonacci scale, and has given back 62% of its territory from the end-2018 low. It’s approaching the strongest support zone of the chart, detectable using the Volume Profile indicator.

Heading toward the bottomBNB chart by TradingView

The retracement pattern has taken the form of a falling wedge, generally seen as a bullish consolidation (but often failing to produce a bullish breakout). Volume has fallen since about May but even now remains respectable.

MACD/histogram nowhere near bullishBNB chart by TradingView

Looking at another weekly chart with MACD indicator (above), we can see that a slow progress on the histogram toward the positive side of the range. There is no arcing to this histogram profile, just flat and vaguely up, which signals what will likely be a lengthy consolidation. The MACD is still pointing down, not curling up at all yet.

If we move to the 3-day chart, we might find some more promising signs for the medium term. There is a bull divergence on the recent price action, although it usually takes many consecutive bull divs to preempt a breakout -- especially with such a lengthy retracement. The histogram looks like it wants to pop over positive after an extensive trip to the center of the range.

We may see a popBNB chart by TradingView

What we might get here is a pop out of the falling wedge pattern for some small gains, followed by a final fall into thick support and more consolidation at the bottom. This is because the weekly chart looks like it needs more time to gather strength, but the 3-day looks like ready for just a bit of upside.

Finally, on the USD pairing chart (3-day), we see that the recent Bitcoin breakdown has kicked BNB down to the strongest support of its entire chart (not unlike the BTC pairing). The $15 zone has seen an extensive amount of volume on the Volume Profile, and strong buying has come in on the last two candles here to keep the exchange crypto safely above that mark.

BNB seems safe about $15BNB chart by TradingView

Otherwise, we see the same slow consolidation of strength on the histogram, while the RSI looks terrible in general.

Binance has been one of crypto’s most important institutions almost since it went live in the summer of 2017, and its exchange token has been one of the best gainers of the last two years. But at present, aside from possible short term trades, it looks like it still has a lot of consolidation to do at its market bottom before it can return to the green.

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