Binance Coin Technical Analysis: Recovery Expected Ahead of Coin Burn

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Binance Coin recently celebrated its 1 year anniversary, where the coin has enjoyed an eye-popping 11,800% gain from its debut price on Coinmarketcap at $0.11 on July 25, to today’s price at $13.09.

Since its arrival, the altcoin has enjoyed a consistent price increase, following a predictable ‘boom bust’ cycle along a proven support line. In more recent months, BNB has become a default ‘stablecoin’ for many investors who now use it to hedge against a falling BTC market.

Looking at the BNB/BTC chart over 3hr candles we can see that Binance Coin is heading back towards the strong uptrending support line, where it has found security during the past 2 significant bearish episodes over March and May.

Observing the last two ‘boom bust’ cycles in Binance’s price action history, we can see a very predictable pattern emerging whereby the price action returns back to the uptrending support before springboarding up towards new all-time high (ATH) targets.

Applying this pattern prediction, we can assume that BNB will continue again in this fashion.

Supplementing chart factors  

Looking at the BNB/BTC chart, we can see a number of indicators that support this projected price action pattern.

  • A ‘death cross’ between the 50/200 EMA lines highlight strong bearish momentum, which is likely to continue driving BNB down towards the uptrending base support.
  • RSI, however, shows the asset is edging closely around the oversold region where we will expect the price to rebound soon once it dips outside of the index channel. This could provide an early trigger for a bullish reversal.

Supplementing news factors

Also in the news, Binance Coin has announced that it will be engaging in another BNB coin burn sometime soon between July 15-July 18. This is where the Binance company buys back BNB at a better-than-market rate and then removes them permanently from the network. This greatly increases scarcity and encourages more investors to buy into and HOLD the coin over time.

“Every quarter, we will use 20% of our profits to buy back BNB and destroy them, until we buy 50% of all the BNB (100MM) back. All buy-back transactions will be announced on the blockchain. We eventually will destroy 100MM BNB, leaving 100MM BNB remaining.” - Binance Coin Whitepaper.

Binance Coin (BNB) Price Prediction

All price targets for this asset are set from the ‘rebound area’ at 19,300 Sats.

Price target 1 (Bullish): First resistance level for the opening bull run will be around 21,021 Sats (8.92% ROI)

Price target 2 (Bullish): Retracement to the 0.786 fib level at 22,717 Sats (17.70% ROI).

Price target 3 (Bullish): Continuation to next resistance at 24,426 Sats (26.56% ROI).

Price target 4 (Bullish): Retracement to 1.0 fib level at 25,798 Sats (33.67% ROI).

Price target 1 (Bearish):
If the base support fails during the next few weeks, we could see a decline to the lower 0.5 fib support at 18,600 (-3.63% loss).

Price target 2 (Bearish): From here we could see increased panic-selling, with the next significant support down at the 0.382 fib level at 16,901 Sats (-12.42% loss).