Binance Coin (BNB) Technical Analysis: These Signals Suggest a Bearish Dip is Approaching

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Binance Coin (BNB) has surpassed its previous all-time over the weekend, after a 15% surge on May 19 helped to take the asset from $25.17 to a new height of $29.14.

The rally, which is likely to have been catalysed by the upcoming Harmony IEO, also pushed the #7 cryptocurrency’s market capital over the $4 Billion milestone for the first time ever.

Looking at BNB today however, we can see that the asset has already started to correct from its new high; as short-term traders take profits and IEO participants cease buying up BNB ahead of the snapshot.

Over the last 24hrs, Binance Coin is reporting a -3.16% loss against the US dollar and is trailing -1.62% behind BTC.

On the 4H BNB/USDT chart we can also see some other worrying signs that foreshadow a harsh bearish reversal in on the cards, as the project heads towards its next token sale on May 27.

Binance Coin (BNB) Price Analysis

On the 4-Hour BNB/USDT chart we can see that there is a bearish contradiction between the current price action and the RSI trend (yellow arrows).

Since May 14, BNB has made two higher highs with the asset following a clear uptrending trajectory. On the RSI however, the indicator line has recently printed a lower low after the asset corrected from the overbought region.

This can also be seen on the 4-Hour MACD indicator, along with increasing selling volume appearing on the histogram.

This deviation on the momentum indicators can be construed as an early warning that BNB’s current uptrend is weakening, and that bullish traders are becoming increasingly exhausted. As a result of this, we should expect the asset to begin correcting as bearish traders take back control of the asset.

In order to confirm that the asset is about to reverse, we need to wait until 2 further triggers are observed: 

  • (1) On the RSI, we can see that momentum has been reliably following a strong uptrending level (white dashed line). Once the indicator line breaks through this line, we will have our first confirmation that selling momentum is beginning to overpower the price action.
  • (2) Finally, we will get our second confirmation of a reversal once candles close beneath either the central MA on the Bollinger Bands, or close beneath the 4-Hour supporting kumo cloud on the Ichimoku indicator.

Once these two signals are met, then it will be more than likely than BNB price will start to decline.

Binance Coin (BNB) Price Targets

All ROIs are calculated from the asset’s current price at $28.30 (AToW).

There are two major support regions for BNB that are likely to catch the falling price action in the short-term.

PT1: $25.40 (-10.25%)
PT2: $24.40 (-13.78%)

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