Binance Coin Outlook For September 2019

By September 16, 2019 Bitcoin Business
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Summary

Binance continues to be the number one crypto exchange throughout 2019, and BNB, its native token, has established itself as a major "altcoin."

The coin's economics are such that as Binance succeeds, so too should the coin's value.

The middle term looks bullish for BNB, though the pairing of BTC may see a dip in the nearer term.

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BNB (BNB-USD), the native token of the Binance exchange, is particularly sensitive to the movements of BTCUSD, basically because it is the base cryptocurrency in the BNB/BTC pair. This puts it in an inverse relationship with BTC, providing a good opportunity for the discerning eye to analyze the pair technically.

Fundamental Outlook

Despite its near-term price decline, Binance Coin continues to have strong fundamental support as the parent company continues to expand its product offering and global reach. The latest acquisition from Binance Corporation is JEX, a crypto exchange platform registered in the Seychelles that offers spot and derivative trading of cryptos.

The acquisition of JEX will lead to the formation of a new exchange to be known as Binance JEX. This will firmly take the firm into the realm of offering derivatives on cryptos, and thus enable it compete with companies such as BitMEX and PrimeXBT, which are enjoying growth as this segment of crypto trading becomes more appealing. The parent Binance exchange does not offer derivative-based crypto trading.

Binance is also planning to open a crypto futures trading platform, and has opened two testnets to enable users thoroughly test this platform.

Technical Outlook

Due to the fluidity of the price movements of Bitcoin, today’s technical analysis for BNB/BTC starts with the daily chart, where we can see that Binance Coin has essentially taken a hammering in the last few days, due largely to the bull run on BTC that commenced on Monday. BTC is coming off a strong support level on the BTCUSD chart at 9250-9400 and is approaching a strong support area seen there at just below 11,000. This may just allow the BNB/BTC bulls to catch a break, as the pair is expected to test a support area at 0.0020175. This price level was a previous resistance in February 2019 and was eventually broken. Hence, it is now expected to play a role reversal function.

Furthermore, price is expected to hit the lower channel border and may find added support there, barring any moves by the bears to send prices lower. We can also see that while price is forming lower lows, the DeMarker oscillator is forming higher highs. This potential bullish divergence may signal a critical turning point for BNB/BTC.

BNB/BTC Daily Chart: September 3, 2019

To get a clearer idea of price movement in the near term, we switch to the hourly chart. Here, we can see that the 0.0022797 price level is a near-term resistance (previous lows August 2019, which now perform a role reversal function). Beyond this price point, we have a long-term resistance at 0.0024333. These would be the natural targets if the price takes off to the upside.

BNB/BTC Hourly Chart

What can we expect from BNB/BTC in terms of price movement going forward?

Scenario 1

The first scenario would bank on a bullish reversal of price action, taking its strength from Bitcoin approaching a key resistance in its pairing with the US dollar. The bullish divergence and proximity to a key price level which may act as support would help the cause of BNB bulls. If price is able to bounce from the support area previously identified, the door would be open for a possible test of the near-term resistance at 0.0022797 and the long-term resistance above it. This move would be validated if BTC hits resistance against the USD at 10,800-11,000. A pinbar or bullish reversal candle would be required to initiate a long order.

Scenario 2

On the flip side, we have a potential support at 0.0020175 with the next long-term support located at 0.0012765. If price breaks the potential support area at 0.0020175, this would naturally be the next price target over the next several weeks. However, it is dependent on BTC continuing its surge against the US dollar. This price move would invalidate the first scenario.

Market Sentiment

The mid-term and short-term outlook of the BNB/BTC pair is:

  • Medium term - Bullish
  • Short term - Neutral to bearish

Please note: This analysis is based on weekly charts and could take some weeks to take effect.

Conclusion

The short-term analysis suggests holding Bitcoin (BTC) while the trading line trends toward resistance. Medium term, new analysis may be needed to show if Binance Coin has strength to break top resistance. For now, the recommendation is not to trade into this altcoin and keep holdings in Bitcoin.

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Disclosure: I am/we are long BNB-USD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Binance continues to be the number one crypto exchange throughout 2019, and BNB, its native token, has established itself as a major "altcoin."

The coin’s economics are such that as […]

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