Binance Coin (BNB) Bulls Aim to Confirm Breakout
Binance Coin (BNB) is currently facing challenges in consolidating its recent breakout above a descending line. After reaching its peak at $599 on August 23, the altcoin has experienced a pullback.
To resume its uptrend, it is crucial for BNB to successfully retest the breakout line and transform it into a support level. On August 21, BNB broke above the descending line that had acted as resistance since June 6, leading to a rapid rally in price to $599 by August 23.
However, buyers seem to be exhausted, resulting in downward pressure on BNB’s price. Currently priced at $567.30, the altcoin is heading towards the breakout line and attempting to retest it. Typically, when an asset’s price breaks above a trend line that had previously served as resistance, it often experiences a pullback to confirm the strength of the breakout.
The retest is crucial as it helps traders validate the breakout’s strength. If the price manages to hold at the breakout level (which now acts as support for BNB), it confirms the validity of the breakout and signifies the likelihood of the new uptrend continuing.
Some of the key momentum indicators for BNB confirm a weakening demand for the altcoin as it approaches the breakout line. The Relative Strength Index (RSI) for BNB is currently in a downtrend, indicating rising selling pressure. Although it remains above the 50-neutral line, a decline in the RSI suggests that the breakout level might be challenging to sustain during the retest.
Similarly, BNB’s Chaikin Money Flow (CMF), which measures the flow of money into and out of the asset, is also declining at 0.18. Although still above zero, the CMF signals that some traders are withdrawing liquidity from the market.
To validate the August 21 breakout, BNB needs to hold the breakout level as support during the upcoming retest. If bulls can successfully defend this level, it will confirm the breakout and pave the way for BNB to continue its upward momentum. In such a scenario, BNB’s price could potentially climb towards $598.90, with the possibility of reaching $652.90.
On the contrary, if the retest fails and the support level doesn’t hold, BNB would likely slide back below the descending trendline, potentially dropping to $522.90. The outcome of this retest will play a pivotal role in determining BNB’s next move.