As a seasoned researcher with a penchant for deciphering cryptocurrency patterns, I find myself intrigued by the current state of Binance Coin (BNB). The recent drop in price has been a common occurrence in this volatile market, but my eyes are drawn to the promising cup and handle pattern forming on the weekly chart.
The price of BNB has decreased approximately 22.7% since the highest point this year, but there are signs it may recover, with chart patterns such as a cup and handle, bullish flag formation suggesting a potential rebound. As of now, Binance Coin is trading at $560, representing a decline of around 10% from its October peaks.
BNB Price Forms a Cup and Handle Pattern
In a recent post on X, Crypto Pig – who boasts more than 37,000 followers – pointed out that the price of BNB is about to experience a significant bullish surge, based on the cup and handle chart pattern he observed. According to him, once the coin surpasses the crucial resistance level at $650, it’s expected to soar upward.
The weekly graph indicates that the digital coin has developed a ‘Cup and Handle’ formation, marked by a rounded base and then either a retreat or a stabilization period. For Binance Coin, the lower part of this pattern occurred in June 2022, with the upper part approaching the significant level at $700.
BNB coin has been forming the handle section since March this year. For this pattern to work out, Binance Coin will need to have a strong breakout above $700.
The measurement of the cup’s depth is obtained by calculating the difference between its top and bottom edges, which comes out to be $512. Given this, it’s projected that the coin will rebound to approximately $1,212 in the long term, as the C&H effect (Cumulative and Harmonic growth) requires months or even years to develop.
As a crypto investor, I’m closely watching the Binance Coin’s price action. A potential 112% bounce from its current level could be on the cards if it manages to hold above its highest swing point on November 7, which was at $397. However, if the price were to drop below this crucial support level, it would suggest further selling pressure, possibly pushing the price down towards the psychological support at $300.
Binance Coin Eyes Breakout From Bullish Continuation Pattern
Simultaneously, it has developed a bullish flag structure, which is recognized by a tall upright segment and then a rectangular shape resembling a flag. Flags are frequently utilized as reliable indicators for potential continuation within the market.
If the price breaks out strongly, it would indicate a bullish movement if it surpasses the top boundary of the flag shape. Subsequently, further growth will be verified if it manages to breach the $700 resistance barrier.
BNB chart by TradingView
In essence, the value of BNB is being underpinned by its continuous token burning process. Last week alone, over 1.77 million BNB tokens worth approximately a billion dollars were burned. The act of burning tokens means that these tokens are no longer in circulation, making the remaining ones more scarce and potentially increasing their worth.
A possible trigger could be if Donald Trump wins the U.S. election, leading to a reduction in interest rates by the Federal Reserve. Meanwhile, BNB Chain has been experiencing increased activity, as its DeFi assets and DEX transactions continue to grow.
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2024-11-05 15:40