Binance Coin (BNB) price analysis 31 Dec: Will $500 support hold?
BNB may drop to the $500 to $440 support zone. Will the price bounce off this zone or break below it?
Binance Coin’s BNB token has risen more than 1,150% in 2021, outperforming bitcoin’s 61% rise and ether’s 413% rally during the same period.
Arcane Research attributed the strong performance of BNB to the growth of the Binance Smart Chain ecosystem, which grabbed some market share from Ethereum. Binance crypto exchange also managed to become the largest bitcoin futures exchange in terms of open interest for 308 days out of 360 days.
Binance announced in a recent blog post that a new “BNB Auto-Burn procedure” will start effective immediately. There are two BNB burning mechanisms, the first is the real time burn and the next is the quarterly burn.
The firm plans to replace the quarterly burn with the new BNB Auto-Burn, which will be automatically adjusting in that the burn amount will be based on the price of BNB, which, in turn, reflects the supply and demand for BNB, as well as the number of blocks produced during a quarter calculated on the basis of on-chain information.
Binance recently received an in-principle licence from the Central Bank of Bahrain to provide crypto services in the kingdom of Bahrain. A subsidiary of Binance, the Binance Canada Capital Market, was granted a crypto financing licence in Canada to function as a money service business.
Could Binance Coin continue its outperformance in 2022? Will BNB go up? Read the BNB price analysis below to find out what the charts suggest.
Binance Coin price analysis: weekly chart
BNB’s price turned down from $669 in November, indicating that bears are aggressively defending the all-time high of $690.93.
The correction is likely to find support at $505. If that happens, it will suggest that bulls have flipped this level into support. The buyers will then again try to propel the price above the all-time high. If they succeed, it will suggest the resumption of the uptrend.
The BNB/USD pair could first start its northward march toward $805 and then rise to the psychological level of $1,000.
What is your sentiment on BNB/USD?
On the other hand, if the price breaks below $505, the decline could extend to the uptrend line. This is an important level for the bulls to defend because if it cracks, the next stop could be $344. The deeper the fall, the longer the time it may take for the start of the next leg of the up-move.
Binance Coin price analysis: daily chart
BNB’s price has formed a large symmetrical triangle pattern. The bulls successfully defended the resistance line of the triangle and will now try to pull the price to the support line. Trading inside a triangle is usually random and volatile.
The relative strength index (RSI) below 45 suggests a minor advantage to bears. If the price breaks below the strong support zone of $500 to $440, it will increase the possibility of a drop to the support line.
This is an important level for the bulls to defend because if it cracks, the pair could start a prolonged bear phase.
Conversely, if the price turns up from the current level or the support zone, the bulls will make one more attempt to drive the pair above the triangle. If they manage to do that, the pair could rally toward the pattern target of $1,012.
Binance Coin: Buy or sell at current levels?
Binance Coin’s price analysis suggests that the bearish momentum could pick up on a break below the $500 to $440 support zone. The bulls will gain the upper hand if they push and sustain the price above the resistance line of the triangle. Until then, trading is likely to remain volatile.
Whatever the outcome might be, your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you are about losing money. This analysis does not constitute investment advice. It’s important to make your own analysis before deciding to invest. You should never invest more than you can afford to lose.
| || |