Binance Coin Bounces Back 27%, Yet Price Faces Uphill Battle: What’s Next For BNB?
BNB made a significant recovery since Aug. 5 and is now finding resistance. This interaction could determine its next major outlook.
Key Takeaways
- BNB peaked at $723 on June 6 but faced strong resistance.
- BNB’s August 5 low at $400 rebounded sharply, showing buyer interest.
- Interaction at the next key resistance will suggest the potential for a new high or further decline.
Binance Coin’s (BNB) quest for a new all-time high was short-lived, as its June 6 peak of $723 was swiftly rejected by strong resistance, triggering a sharp downturn.
However, in a stunning reversal, BNB’s price rebounded from its Aug. 5 low of $400, surging 27% in a matter of days and leaving a 15% wick on the daily chart.
The sudden buying frenzy raises a crucial question: is this the start of a sustained uptrend or merely a fleeting relief rally driven by oversold conditions?
As buyers appear to be stepping in to scoop up the dips, can BNB overcome its struggles at the $520 resistance level and reignite its bullish momentum?
BNB Price Analysis
Following its March 16 peak of $640, Binance Coin (BNB) experienced a decline to $505 by March 20 before forming a series of higher lows, with the most recent being $540 on May 1.
This price action, combined with consistent resistance at $620, suggested an ascending triangle formation, indicating that BNB was consolidating and potentially preparing to resume its uptrend that began in October of the previous year.
According to Elliott Wave Theory, this could represent the fourth wave in a five-wave upward sequence.
However, after briefly spiking to a new yearly high of $721 in early June, BNB quickly retraced to the ascending support at $610 before breaking below it on June 17.
The subsequent decline formed a three-wave pattern, culminating in a low of $400 on Aug. 5, which coincided with a 1.272 Fibonacci extension level.
This leaves two possible scenarios: either BNB’s five-wave impulse ended on June 6, marking the beginning of a downtrend, or the June 6 spike marked a continuation of a larger sideways movement that began in March.
If the latter is true, the Aug. 5 low could mark the completion of this pattern, paving the way for an uninterrupted ascent to a new all-time high above $800. Which scenario is more likely to play out?”
Bullish Vs. Bearish Scenario
In both cases, as suggested by the wave analysis in the technical indicators, BNB most likely found its local low on Aug. 5. The recovery that followed could either be corrective or a starting impulse, leading to a new all-time high.
Although still unconfirmed, a descending triangle formed on June 6, whose price resistance level is currently retesting. The interaction result could be an early differentiating factor between the two scenarios.
As the price found support at the 0.618 Fib retracement from its October 2023 low to the June 6 high, the first bullish one could be more likely. However, should we see a rejection and an immediate downturn, it could imply that BNB will face another sharp decline to the next one of 0.786 at $307.
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