Binance Coin (BNB) is trading very close to a long-term resistance level, above which it has been attempting to break out for the past ten days.
While the direction of the next move is not entirely clear, a breakout seems more likely.
BNB Horizontal Levels
The BNB price began a rapid upward movement after a sharp drop on Sept 4. In a span of only ten days, the price proceeded to regain all of its previous losses to reach a new yearly high of $33.35 on Sept 14.
After a corrective movement, BNB reclaimed the $26.70 area, which is now expected to act as support. Conversely, the closest resistance area is found at $31.70.
Since the beginning of October, BNB has been trading between these two levels but is closer to the latter.
Possible Breakout
Cryptocurrency trader @raticoin1 outlined a BNB chart, stating that if the price breaks out from the current resistance area, it could increase all the way to $40 and reaching a new all-time high after.
The resistance level in the tweet is the $31.70 area outlined in the previous section. BNB has also been following an ascending support line since Sept 4, which creates an ascending triangle when combined.
Technical indicators in the daily time-frame are bullish/neutral. While the MACD, RSI, and Stochastic Oscillator are positive, they have stopped increasing and have a relatively neutral slope.
However, if a breakout transpires, the $40 area would be the target found by projecting the length of the triangle to the breakout point and resistance level.
The long-term chart supports this possibility since it shows that the price has already moved above the 0.618 Fib level of the entire decrease — a very common level for corrections to end.
In addition, if BNB were to move above the current resistance area (0.786 Fib level), the road to $40 would be free of any other major resistances.
Wave Count
While the long-term count is not entirely clear, it is likely that BNB has completed an A-B-C correction that began on Oct 14 and initiated a bullish impulse afterward.
Since the impulse looks completed, a short-term retracement would be expected before the price resumes its upward movement.
To conclude, BNB is expected to break out from the current resistance area after a possible short-term drop.
For BeInCrypto’s previous Bitcoin analysis, click here!
Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.
