Binance Coin (BNB) is having trouble consolidating its recent breakout above a descending line. The altcoin has witnessed a pullback since its peak at $599 on August 23.
If BNB successfully retests the breakout line and flips it into support, it will resume its uptrend.
Binance Coin Bulls Must Defend This Support Level
On August 21, the altcoin broke above the descending line below which it had traded since June 6. Its price quickly rallied to $599 by August 23.
However, buyers’ exhaustion has set in since then, putting downward pressure on BNB’s price. At $567.30 at press time, the altcoin is trending toward the breakout line, attempting to retest it.
Usually, when an asset’s price breaks above a trend line that has formed resistance, it may witness a pullback to “retest” the level it just broke through.
This retest is important because it helps traders confirm the strength of the breakout. If the price successfully holds at the breakout level (now acting as support in BNB’s case), it confirms the breakout’s validity, suggesting that the new uptrend is likely to continue.
Some of BNB’s key momentum indicators confirm the weakening demand for the altcoin as it trends toward the breakout line. For example, BNB’s Relative Strength Index (RSI) is in a downtrend as of this writing.
Although it remains above the 50-neutral line, the indicator’s decline hints at rising selling pressure. If selling pressure gains momentum, the breakout level may be hard to hold when the retest occurs.
Read more: How To Buy BNB and Everything You Need To Know
Likewise, the coin’s Chaikin Money Flow (CMF) — which measures the flow of money into and out of the asset — is in a downward trend at 0.18. Although still above zero, BNB’s CMF signals that some traders are removing liquidity from the market.
BNB Price Prediction: A Rally Above $600 Is Possible Only If…
BNB’s August 21 breakout above its descending trendline will only be validated if it holds as support during the upcoming retest. If bulls successfully defend this level, the breakout will be confirmed, allowing BNB to resume its upward momentum.
In this scenario, BNB’s price could climb toward $598.90, with potential to reach $652.90.
Read more: Binance Coin (BNB) Price Prediction 2024/2025/2030
On the other hand, if the retest fails and the support doesn’t hold, BNB would slip back below the descending trendline, likely dropping to $522.90. The outcome of this retest will be crucial for BNB’s next move.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
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Abiodun Oladokun
https://beincrypto.com/bnb-bulls-seek-to-confirm-breakout/
2024-08-26 07:39:21
