Binance Coin, the exchange token of the popular exchange Binance, has done well in the last 24 hours. The coin has seen a 1% surge and currently stands at $21.83 per coin. The market cap of BNB is $3.152 billion making it the 10th largest cryptocurrency in the world.
BNB 4-hour chart
Source: BNBUSDT TradingView
On the 4-hour chart, BNB seems to be forming a rising wedge with the price surging 6.46% in the last 8 hours. There is an opportunity for the price to surge higher towards the upper trendline, however, it has to breach the resistance at $22.3.
The breakout from the broadening ascending wedge is usually to the downside, hence, a drop can be expected for BNB in the long-term scenario. The drop will push the price down anywhere between 10-20% depending on the sellers’ momentum.
The first target from this drop could hit the support at $19.02 aka the 50 DMA [yellow], which would be a 10% drop from the current level. A further drop could push the price towards the 200 DMA [purple] at $17.67.
Although the second seems unlikely, it could be attained if BTC crashed to $9,665 to fill the CME gap or any other uncertain events like that.
Correlation
Source: Coinmetrics
An interesting development over the months is the drop in BNB’s correlation with BTC. The correlation has dropped to levels last seen in early 2018. This is bullish as the coin is no longer, in a relative sense, bound to Bitcoin and its movements [although this does not apply to flash crashes or black swan events like the March crash].
This drop in correlation also meant that BNB can form its own patterns and breakout from them without being affected by BTC’s drops. This is perhaps due to the sudden increase in DeFi and their tokens that have caused a mania around yield farming.
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