Binance Coin (BNB) is currently undergoing a crucial test as it attempts to consolidate its recent breakout above a descending line. After reaching a peak of $599 on August 23, the altcoin has experienced a pullback, raising questions about the sustainability of its upward momentum.
The key to BNB’s continued uptrend lies in its ability to successfully retest the breakout line and flip it into support. If it can achieve this, it will signal a strong confirmation of the breakout and pave the way for further gains.
Bulls Must Defend Support Level
BNB’s breakout above the descending line on August 21 marked a significant milestone. However, the subsequent price surge has been followed by a period of selling pressure, indicating that buyers may be exhausted.
As BNB approaches the breakout line again, it is essential for bulls to defend this level as support. A successful retest would confirm the breakout’s validity and suggest that the new uptrend is likely to continue.
Technical Indicators Signal Weakening Demand
BNB’s Relative Strength Index (RSI) and Chaikin Money Flow (CMF) are both showing signs of weakening demand. The RSI is in a downtrend, while the CMF is below zero, indicating that some traders are selling their BNB holdings.
If selling pressure intensifies during the retest, it could make it difficult for BNB to hold the breakout level as support.
The outcome of the retest will be crucial for BNB’s future price movement. If bulls can successfully defend the breakout line as support, it would confirm the breakout and open the door for a rally towards $600 and potentially higher levels.
Also Read: Why Binance Is Outspending Ripple – $200M Investment In Crypto Compliance
However, if the retest fails and BNB falls back below the descending trendline, it could signal a reversal and a potential drop to $522.90.
Binance Coin is currently at a critical juncture. The success of its retest will determine whether it can maintain its upward momentum or suffer a reversal. Investors and traders should closely monitor BNB’s price action and technical indicators to make informed decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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