Binance, the largest cryptocurrency exchange in the world measured by volume, has been going through a rough patch over the past few weeks. The platform has been the subject of regulatory scrutiny from watchdogs in countries such as the United Kingdom and Japan, and it is also facing investigations in the United States of America and Germany. The price of Binance’s native cryptocurrency does not appear to be affected by the most recent revelations, despite the fact that the exchange is currently battling through a period of uncertainty.
In point of fact, BNB has been forming a symmetrical triangle over the course of the last few days, which has presented the possibility of a breakout to the upside moving forward. At the time of this writing, BNB was trading at $294.8, representing a gain of 3.8% over the preceding twenty-four hour period.
The 4-hour chart of Binance Coin
The retracement that BNB experienced on July 21 and its movement after that led to the formation of a symmetrical triangle, which is a pattern that can result in a breakout in either direction. Although the preceding trend in the market was bearish prior to the formation of this pattern, there were indications that the market was about to experience a trend shift. The upper trendline collided with the 4-hour 100-MA (blue), and an upwards breakout could occur if the price range of $300-305 is broken above with a close.
Reasoning
The bullish crossover between the +DI and the -DI that was noted by the Directional Movement Index occurred as buyers prepared to overturn market control. The Squeeze Momentum Indicator found that the bearish momentum was decreasing, and it predicted that the beginning of a price swing would be signalled by the appearance of the first green bar, which would be followed by a white dot.
It’s interesting to note that the MACD line had already crossed above the Signal line, and the histogram of the line suggested that some northbound pressure had already worked its way into the price.
According to the factors discussed above, the likelihood of a breakout to the upside was higher than the likelihood of a breakout to the downside. A rally of 15% toward the resistance zone located between $320 and $335.5 could be the result of such an outcome. According to the Visible Range, this region has been noting a high level of interest, and it may trigger a minor correction before the next upswing.
Traders who take advantage of this movement by setting up a long trade can profit from it, but a more prudent strategy would be to wait for BNB to break above its 100-day moving average before entering a position.
Levels that need special attention
Entry: $303
Take-profit: $335.5
Stop-loss is set at $275
Risk/Reward: 1.16x
Conclusion
Long opportunities presented themselves for traders when the anticipated breakout of BNB from its symmetrical triangle occurred. An entry was placed just above BNB’s 100-MA and at $303, and a take profit was determined to be at the upper range of its resistance zone, which was also an area that collided with the 200-SMA.