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The Binance Coin price has been correcting inside a bullish pattern since reaching a high of $41 on June 21. There is a significant support area at $10, which could propel the price to a breakout.
Binance Coin is the native token of the Binance exchange. On December 20, the exchange announced that it had made investments in the crypto derivative platform, FTX.
#Binance Announces Strategic Investment in FTX and Lists FTX Token (FTT)https://t.co/wcedKpy9ds pic.twitter.com/dVrLCQiV74
— Binance (@binance) December 20, 2019
Despite this and a recent string of positive news from the exchange, the price has decreased by 40 percent over the past two months. This decrease has been less pronounced in the BTC pair, since the price of the latter has also been decreasing over the same period of time.
Cryptocurrency trader NIKA stated that this correction is coming to an end. He tweeted that the BNB price is one to keep an eye on, since it has created a six-month-long descending wedge. The wedge is considered a bullish pattern, suggesting that a breakout should follow afterwards.
$BNB worth keeping an eye on. pic.twitter.com/i7Dskcg1fX
— Nika
(@G_maker) December 19, 2019
Descending Wedge
The BNB price has indeed been trading inside a descending wedge since May. Both the resistance and support lines of the wedge have been validated at least thrice. The wedge is projected to end on February 2020.
The main support area is found near $10. Since the support line of the wedge is near $10 on February, we could see a BNB price decrease at the rate predicted by the wedge until it reaches this support area.
Looking at the short-term gives us one possible method in which this move will transpire.
The Binance Coin price is trading inside a shorter-term descending wedge. A breakout from this pattern would take the price to the resistance line of the longer-term wedge. Afterwards, if it decreases towards the support line, it would eventually drop to the $10 support area.
Technical indicators support this breakout since both the RSI & MACD have been generating a bullish divergence up to the 12-hour time-frame.
The BNB price is trading below its 50- and 100-day moving averages (MA), which have made a bearish cross. Therefore, some resistance is expected after the breakout — possibly causing the price to drop to the support area.
An eventual breakout from the long-term wedge would take the price to at least $20, at the 200-day MA or an upper limit of $30, the next resistance area.
BNB/BTC Pair
The BNB/BTC pair shows that the price is trading inside a major support area near 18,500 satoshis. The price has made a double bottom relative to the price in October. Also, when the price reached this support area on January 2019, it created a long lower wick, a sign of buying pressure. The next support area is found at 15,000 satoshis.
Technical indicators support the hypothesis that the price will bounce at the current level and begin moving upward.
The weekly RSI has generated a bullish divergence and the weekly MACD has made a bullish cross. The last time this occurred was on December 2018, and an upward move of 215 percent transpired shortly afterwards.
To conclude, both the BNB/USD and BNB/BTC pairs have decreased to significant support areas and have shown signs of beginning a reversal. The former allows for a slight decrease before the price eventually begins an uptrend while the latter suggests that one will transpire from the current price level.
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