As the price of Bitcoin (BTC) slowly consolidated in recent months, altcoins took center stage. Recently, massive moves were made by Chainlink (LINK), Zilliqa (ZIL) and Elrond (ERD) and that’s just to name a few of the most popular altcoins.
The last of the three is an IEO (Initial Exchange Offer), which means that investors‘ eyes are automatically focused on Binance Coin (BNB), which so far this month has outperformed Bitcoin by approximately 17%. Also, if the price of Binance Coin starts to move, IEO tokens usually follow the same path.
Crypto market daily performance
The price of BNB is above the 100 and 200 day moving average
As shown in the chart below, this week the BNB/BTC pair is trading above the 100 and 200 day moving averages. This is a crucial breakthrough, as in previous times it marked the beginning of a new rally.
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BNB/BTC 1-day chart
As the daily chart shows, BNB performed a double bottom structure, after which it produced a slight upturn.
The BNB price then tested the old support of 0.0016800 sats and with that level confirmed there was a small break in the bearish trend. This breakout led to a return to the previous months‘ level.
This range is defined between the 0.0018000 sats support and the 0.0023000 sats resistance. Recovering this previous level is essential for further upward momentum.
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If that level maintains support, it is likely to wait for a test of the highs again. This is because the price tested the lows, lost support and regained it. When this happens, it is usually a sign that buyers are after the asset, causing a re-test of the other levels in the range.
Applying this argument to the daily chart, a renewed test of the 0.0023000 sats resistance level would mean that consolidation above the 100 and 200 day moving average could occur and this would trigger a repeat cycle. However, what crucial steps must BNB take for this to happen?
The BNB/BTC pair needs to first break out of the resistance range for confirmation. The first step would be to claim the 100 and 200 day moving averages as support and hold them above the 0.0018000 saturation level.
However, if the Crypto Trader wants to start accelerating, it has to break the resistance range at the saturation level of 0.0022500-0.0024000. Breaking that resistance range would allow a rally to occur towards the peak.