Binance Coin: How traders can short this setup and make profits
Considering weak on-chain activity and little progress on the development front, it is safe to assume to that retail interest seems to be the primary driver for Binance Coin. The alt did not disappoint, in terms of keeping up with broader market trends, especially in recent times after BTC reclaimed the $55K mark.
However, a minor correction in the wider market brought about some bearish predictions for the world’s fourth largest altcoin. Its bullish structure was threatened due to a potential breakdown from an up-channel. At the time of writing, BNB traded at $421, down by 4.3% over the last 24 hours.
BNB 4-hour Chart
BNB was witnessing a third assault on the lower trendline of its pattern which coincided with a support line of $420. Since the 4-hour 50-SMA (yellow) flipped to bearish, sellers had the momentum to enforce a breakdown from BNB’s setup.
A move below $4250-$420 could trigger an immediate 4.5% decline towards the confluence of the 4-hour 200-SMA (green) and $400-support. If buyers are unable to punch back, BNB could bleed further until it reaches a major defensive line of $385. Overall, this would represent an 8.5% sell-off from BNB’s press-time level.
On the other hand, a rebound above the 50-SMA would lower chances of a bearish outcome. Bulls can target a fresh higher high around $450 after negotiating past the mid-line of the pattern.
Interestingly, indicators sided with the bears and flashed multiple sell-signals. For instance, the RSI was unable to find support at the mid-line and was now in bearish territory. A move below 40 would attract more selling pressure.
The Awesome Oscillator agreed was in agreement after moving below its half-line on the back of a bearish twin peak setup. The MACD did not fare too well either. Consistent lower peaks were spotted on the index as it made its way towards the equilibrium mark.
Based on the abovementioned factors, BNB was tipped to break south from its up-channel in the coming sessions. Traders can capitalize by taking up short positions once BNB closes below the $420. A reasonable take-profit can be set at $400 while stop losses can be placed above the 50-SMA at $430.Source