Binance Coin: How Traders Can Sell This Setup And Make Profits
Given the low activity on the chain and the slow progress on the development front, it’s safe to assume that retailer interest appears to be the main driver for Binance Coin. Alt has not disappointed, in terms of following broader market trends, especially in recent times after BTC recovered the $ 55,000 mark.
However, a minor correction in the wider market resulted in a bearish forecast for the world’s fourth largest altcoin. Its bullish structure was threatened due to a potential break in an upstream channel. As of this writing, BNB was trading at $ 421, down 4.3% in the past 24 hours.
BNB chart in 4 hours
Source: BNB / USD, TradingView
BNB was witnessing a third assault on its pattern’s lower trendline which coincided with a support line of $ 420. Since the 4-hour 50-SMA (yellow) turned bearish, sellers have had the momentum to force a break in the BNB pattern.
A move below $ 4,250- $ 420 could trigger an immediate 4.5% drop towards the confluence of the 4-hour 200-SMA (green) and $ 400 support. If the buyers are unable to fight back, BNB could bleed more until it hits a major defensive line of $ 385. Overall, this would represent an 8.5% drop from the BNB’s press time level.
On the other hand, a rebound above the 50-SMA would reduce the chances of a bearish outcome. Bulls may aim for a new higher high around $ 450 after trading beyond the pattern’s midline.
Reasoning
Interestingly, the indicators sided with the bears and issued several sell signals. For example, the RSI was unable to find support on the midline and was now in bearish territory. A move below 40 would attract more selling pressure.
The Awesome Oscillator agreed he was okay after moving below his half line at the back of a bearish double peak pattern. The MACD isn’t doing too well either. Consistent lower peaks were spotted on the index as it moved towards the equilibrium mark.
Conclusion
Based on the factors mentioned above, BNB was expected to move south out of its upstream channel in the next few sessions. Traders can capitalize by taking short positions once BNB closes below $ 420. A reasonable take profit can be set at $ 400 while stop losses can be placed above the 50-SMA at $ 430.