The Binance Coin price has stalled at a critical level. With the crypto rally pausing, we wonder if BNB might head lower in the near term.
Cryptocurrencies have been attempting to fight back from last week’s bloodbath. However, over the last two days, prices have struggled to extend their gains.
Bitcoin can’t seem to clear the $40,000 mark convincingly. In turn, Ethereum has also failed to break $2,900. Subsequently, the Binance coin price seems to have hit the ceiling at $385.00.
BNB is last trading at $365.00 after again failing to clear resistance.
BNB is the native token to the Binance exchange. Because of this, its price is highly correlated to other crypto assets.
The more popular the market is as a whole, the more likely the exchange volumes will increase. This results in a greater demand for BNB.
Markets typically attract more interest and users when prices are rising. Therefore, it makes perfect sense that the Binance coin price had such a great start to 2021.
Just as BNB followed the market higher earlier in the year, it also followed it lower last week.
On the 3rd of May, BNB set a new price record at $693.40. Quite an achievement considering it started the year at $40.00. Sadly, the +1,600% gains would not last long.
After the ATH came last week’s mass liquidation. On Sunday, BNB traded as low as $211.40.
Buyers were encouraged by the -70% discount from the high. The buying that followed helped the Binance coin price sharply recover, and BNB soon tested resistance at $385.00.
How the price reacts here will indicate if the rally has run aground or simply taking a breather before the next leg higher.
The 4-hour price chart shows that BNB has run into the resistance of a descending trend line from the 12th of May. The trend currently sits at today’s high of $375.30.
Of course, the price has rallied +80% over the last four days, so a pause was inevitable at some stage.
Nonetheless, this is an important level. A failure to break above the line increases the chances of a material pull-back in the price.
Should this happen, the Binance coin price could target support at $300.00. This proved a good level of support when the market dipped on the 25th of May.
Having said that, if the price manages to clear the resistance line, it should continue higher.
The best trade at the moment is to wait for a confirmed breakout or a confirmed failure.
The strength/weakness of the broader market will be a good indicator of which of the two screnarios plays out.
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