A Flag Pattern Offers Recovery Opportunity
A flag pattern formation intact despite the current downturn offers the Binance Coin price an opportunity to regain recovery momentum.
Amid the prevailing market downturn, BNB, the native token of leading cryptocurrency exchange Binance, has demonstrated remarkable resilience, consistently holding strong above the crucial $285 support level. As previously highlighted by Coingape, the Binance price is currently exhibiting a bullish flag formation on its daily chart, a development that suggests a potential for buyers to regain momentum and propel the token to higher levels.
Factors Contributing to 38% Growth Potential
A recent reversal from the flag pattern resistance indicates the BNB price may continue in the correction phase.
- As per the Fibonacci retracement tool, the coin traders may face sufficient demand pressure at $295 and $280.
- The intraday trading volume in the BNB coin is $1.027 Billion, indicating a 20% gain.
Over the past month, the price of Binance Coin has shown significant volatility, fluctuating within the confines of a flag pattern defined by two converging, downward-sloping trendlines. Although these trendlines indicate a correction phase, the coin’s maintenance above the 38.2% Fibonacci retracement level suggests that the broader recovery trend remains unbroken.
Impact of Bitcoin’s Correction on BNB Price
As the Bitcoin price fell below $40,000, the wider crypto market experienced increased selling pressure, extending the correction phase across most major cryptocurrencies. During this sell-off, BNB’s price took a notable hit, dropping from $320 to $295, culminating in a 7.85% decline over the last 48 hours.
While there is a potential risk of the price of BNB dipping to $280 due to ongoing supply pressures, buyers still have a significant chance to reverse the trend as long as the flag pattern remains valid. Consequently, bullish traders should be on the lookout for a breakout above the pattern’s resistance trendline, as this would be a strong indication of an uptrend continuation.
Is Binance Coin Ready for a Bull Run?
During the December rally, the BNB price experienced a significant breakout from the resistance trendline of a symmetrical triangle pattern that had been forming over two years. This escape from a prolonged sideways trend signifies a major shift in market dynamics to provide an advantageous opportunity for buyers to re-enter the market and continue the recovery trend. Following the trajectory suggested by the triangle pattern, there’s a potential for BNB’s price to target a substantial high of around $560.
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