Binance Coin on Wednesday surged as high as 8.5 percent against the US Dollar after the company released a demo video of its decentralized exchange.
The BNB/USD is now trading at 6.33-fiat, down 1.89% from its intraday high at 6.45-fiat. The pair is moving inside a rising wedge channel, a price wave reversal pattern. As it heads to a completion – signified by depleting volume and price bouncing inside the wedge range – BNB/USD is likely to break out of the said channel to the downside. Considering a short trade when the price breaks down the wedge support and try exiting long positions to minimize potential losses. At the same time, consider putting a stop loss order just above the most recent high as you enter a short trade.
Other indicators are also pointing to a potential downside action. On the 1H chart, the 50-period moving average has a lead over the 200-period moving average. At the same time, the RSI momentum indicator is consolidating while staying inside a correction from the overbought area. The Stochastic Oscillator, meanwhile, has just overreached its upside target and should follow a remedial course in the next few hours to the downside.
As a correction takes place, the BNB/USD is likely to find support at 50-period SMA. An extended bearish action would allow the pair to complete a head and shoulder pattern while eyeing 5.47-fiat as the interim neckline.
DEX Demo Revealed
Binance has just released the video demo of its decentralized exchange, dubbed Binance DEX. The recording also includes a brief sneak-peak into Binance Chain which, according to the project developers, would offer “low latency, high throughput trading, as well as decentralized custody of funds.”
The combined prowess of a DEX and a public blockchain allows BNB holders to speculate on a bright future of the Binance platform. Binance Chain, in particular, expects to function like Ethereum blockchain, which would enable projects to issue their company tokens on the main chain. Overall, the development leads to a binance-based ICO market of its own.
As for DEX, the platform looks and functions almost similar to what Binance offers in its centralized version of trading. Except, it allows users to generate a 24-word mnemonic seed phrase for private keys, a “balance tab” to update users about their account status, and a “user icon” that shows individual wallet addresses.
Binance is looking to release the DEX platform earlier next year.
Featured Image from Shutterstock. Charts from TradingView.