Binance is one of the best and most popular cryptocurrencies in an entire space. And might be a coin with the largest utilities. It can be used in the BINANCE trading ecosystem, a leading crypto exchange in the market with millions of daily trading volumes and BNB can also be used in the dApps powered by Binance Smart Chain. Without a doubt, it's a leading cryptocurrency by trading volume, market cap, and overall ranking.
In this article, we will look into the BNB chart on the daily timeframe and do some technical analysis with the help of basic trading indicators. Before going into analysis do check the warning.
Note: The purpose of this Technical Analysis is to show the use of indicators and understand their meanings. So before making any financial decisions do your own research. Now sit back and enjoy the analysis!!
Support & Resistance
Support and resistance zones provide a better picture of the current scenarios and strong levels of bulls as well as bears. Check out the support and resistance zones on the BNB/USDT daily chart.
Current Support Zones
Primary Support Zone: $325 - $330
Secondary Support Zone: $295 - $300
Recently, the primary support zone has been tested successfully and the price bounced back from that zone. If the price approaches towards this support then it can be tested again to provide a strong. But in the worst condition, the price failed to find support at primary support then secondary support is ~$300 which has not been tested for almost a year now.
Current Resistance Zones
Primary Resistance Zone: $370 -$380
Secondary Resistance Zone: $440 -$450
Both the resistance zones are strong and in the play recently. A few days ago, the price has shown a breakout from the primary resistance zone but instantly there was a selling pressure on BNB. If in the upcoming days BNB managed to break this primary resistance zone then the next secondary resistance zone is at ~$450 which was also successfully tested in the past two to three weeks.
Failed Trend Reversal
If you see in the chart below you can see a downtrend line, connecting the dots starting from the November of 2021. In the past couple of days, the price has seen a breakout from the downtrend line as well as from the primary resistance zone. But the price failed to form a Higher High (HH) which does not confirm the trend reversal, if there was the formation of a Higher High then it would be confirmation of trend reversal.
Now the previous downtrend line was acting as a resistance zone but now can act as support. The price is approaching the support of this downtrend line as well as the primary support zone.
What Are Indications From Indicators?
We have seen support and resistance on a daily timeframe, a breakout of the downtrend line and retest & an approaching price towards the support zone. Now, let's have a look at the trading indicators.
Smooth Moving Average (SMA 200)
Smooth Moving Average is a lagging indicator indicating a long-term trend. A trader can integrate SMA 200 in his/her trading setup in order to forecast a trend and utilize it in other trading decisions.
You can see the SMA 200 line in the chart below. The price has crossed down the SMA 200 line in mid-January 2022, shifting the long-term trend in a downtrend. Still, now the price is way below the line indicating a long-term downtrend.
MACD & RSI (Moving Average Convergence Divergence & Relative Strength Index)
In the Moving Average Convergence Divergence (MACD) indicator the MACD line is above the signal line indicating the bullish momentum but the MACD histograms are fading out which indicates the bullish momentum is weakening. It confirms the retest and the price approaching the support zone as there is a possible cross down on the MACD.
The Relative Strength Index (RSI) is at ~45 level, which is considered a neutral zone. So from the RSI, we can forecast that the market is in a neutral area.
On Balance Volume (OBV)
Another very beneficial trading indicator but not that popular, it shows the trading volume difference between Up days and Down days. At the bottom of the chart, you can see the OBV line, it is flat at the moment indicating that the volume on Up days is almost the same as the volume on down days. This shows that at current price levels both bears, as well as bulls are of the same strength and no one is dominating the market.
Check out the entire trading setup for BNB/USDT trading pair on a daily timeframe.
Conclusion
The conclusions we can derive after looking at support & resistance, trend line, and from the indicator that the Binance Coin is in the downtrend on all three short, medium, and long term trends. The price has to break out from the primary resistance and the SMA 200 line in order to be on the uptrend, a piece of positive news regarding crypto space and the bull power can help out here but for now, it's in the downtrend.
Hope you found this article informative and learned the use of basic trading indicators as well as trendlines over the chart. Do share your opinion on this analysis and your overall opinion on the current situations of crypto market and about the Binance Coin (BNB).
