Binance Coin (BNB) has weathered a brief dip in the wake of regulatory action against the crypto exchange and CEO, bouncing back to trade near a key resistance level.
Despite news of a civil enforcement action from the CFTC causing a 5% drop to $310, BNB has since climbed back up to $314.62, up 1.56% in the last 24 hours, according to CoinMarketCap.
With the relative strength index pointing toward further gains, buyers may be poised to break through resistance at $312.6 and push toward $315.
Binance Coin Could Fall Further Down
According to BNB’s chart analysis, there may be more potential for the coin to decrease before becoming oversold. This idea is further supported by the fact that the token’s 30-day moving average is set to dip below its 200-day average.
The recent drop in BNB’s price was fueled by the CFTC’s allegations against Binance, accusing the exchange of facilitating unauthorized derivatives trading for U.S. customers and neglecting customer identity verification protocols.
If the CFTC’s accusations are proven true, Binance and BNB could face even more roadblocks ahead. This decline falls within a well-known chart pattern called a symmetrical triangle, which traders often use to predict potential price breakouts.
This pattern typically indicates that buyers and sellers are locked in a tight battle, with neither side gaining the upper hand.
As the price bounces back and forth within the triangle, it creates a tightening range, as if the pressure is building up like a coiled spring. Eventually, the price is forced to break out of the triangle, with traders watching closely to see which direction it will move.
If the breakout is to the upside, it’s a bullish sign that buyers have taken control and the price is likely to rise. Conversely, a downside breakout signals that sellers have seized the initiative and the price is likely to fall.
What Traders Should Expect
At present, the BNB price has taken a downward turn after hitting the overhead trendline, leading to a bearish cycle within the pattern. This bearish cycle may potentially cause a significant drop of 16-18% in the coin price, as it heads toward the pattern’s lower support trendline.
BNB total market cap currently at $49 billion on the daily chart at TradingView.com
Looking at the daily timeframe, Binance Coin (BNB) is seen trading within a broad range, with support located at $302 and resistance at $346.3.
As the coin battles to find its footing, traders are keeping a close eye on whether it will break through the resistance or succumb to the downward pressure and drop to the lower support level.
Ultimately, only time will tell which direction BNB will head next.
-Featured image from CoinBrain