Binance Coin (BNB) is poised to extend its seven-day rally. The coin’s price action indicators on the one-day chart show that it has broken out of a descending channel that it has been trading in since early June.
If the breakout is successful, the fourth-largest cryptocurrency by market capitalization would trade at a monthly high of $598.9.
BNB Bulls Push Further
BNB price has been falling since early June, resulting in the formation of a descending channel. This pattern is formed when the price of an asset continuously draws lower highs and lower lows, creating a downward sloping channel on the chart. The bearish pattern shows that sellers are in control and the price of the asset could continue to fall as long as it remains within the channel.
Since entering this channel, the price has dropped by 17%. However, with a strong uptrend following the general market decline on August 5, BNB is breaking out of the descending channel.
BNB Price Chart | Source: TradingView
When the price of an asset is near the upper line of a descending channel, it indicates that the downward momentum is weakening. A successful breakout signals a shift from bearish to bullish sentiment and the market’s control shifts from sellers to buyers. Traders often interpret this as a continuation of the uptrend.
For BNB, the technical setup on the 1-day chart supports this outlook. The Moving Average Convergence Divergence (MACD) indicator shows the MACD line (blue) above both the signal line and the zero line (orange). This is a bullish signal, indicating continued buying pressure and upward momentum.
MACD tracks price trends, direction, and momentum changes, usually confirming an uptrend when the MACD line is above both the signal line and the 0 line. This setup shows that BNB is currently in an uptrend.
Further supporting the bullish outlook is that BNB is trading above the Leading Span A of the Ichimoku Cloud and approaching the Leading Span B. This position within the Ichimoku Cloud suggests that the market is in a bullish phase, likely to continue moving upwards.
BNB Price Chart | Source: TradingView
Leading Span A and Leading Span B are the main components of the Ichimoku Cloud, an indicator that identifies trends, support, resistance, and potential market reversals. Although it is above Leading Span A, if BNB successfully breaks above Leading Span B, it will signal the continuation of the uptrend.
BNB Price Prediction: Still at Risk of Fluctuation
While BNB’s current technical setup is bullish, the increasingly intense market volatility puts it at risk of swinging in either direction. This is further evidenced by the widening gap between the upper and lower bands of the Bollinger Bands (BB) indicator.
An asset's BB indicator measures market volatility and identifies potential overbought or oversold conditions. The upper band represents the upper range of price movement, while the lower band tracks the lower range. When the gap between these bands widens, it indicates increased market volatility.
BNB Price Analysis | Source: TradingView
BNB holders remain bullish, as shown by the positive on-chain sentiment weight, currently at 1.87. This index measures the overall market sentiment regarding the asset.
When the value is above 0, it indicates that most online mentions, news, and social media discussions are bullish. Positive sentiment weighting is often a precursor to continued price growth.
BNB Price Analysis | Source: TradingView
If the bullish sentiment continues, BNB could rise to a one-month high of $598.9. The continued bullish sentiment from holders shows sustained confidence in the asset, which is likely to fuel further upside in the near term.
However, if the trend reverses and the bears regain control, the price could drop to $560.9.
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