Binance Coin (BNB) Price: Faces Critical Support Test Following Recent Breakout, What’s Next?

TLDR:

• BNB broke above a descending resistance line, reaching $599
• Price has since pulled back to $567.30, retesting the breakout level
• Technical indicators show mixed signals for BNB’s direction
• Successful retest could lead to further gains towards $598.90 or $652.90
• Failed retest may result in a drop to $522.90

Binance Coin (BNB) recently broke above a descending resistance line that had been in place since June 6, 2024. This technical breakout propelled BNB to a high of $599 just two days later.

However, since reaching this peak, the cryptocurrency has faced selling pressure, causing a drop to around $567.30.

The recent pullback is a natural part of the breakout process. When an asset like BNB breaks through a significant resistance level, it often experiences a retracement to test the new level as support.

This retest is crucial for validating the strength of the breakout and determining whether the upward trend will continue.

The retest of the breakout line, now acting as support, is a critical phase for BNB. A successful retest would confirm the breakout’s validity, suggesting that BNB could resume its uptrend.

If BNB’s price stabilizes and holds above this level, it could signal the continuation of its bullish trajectory. On the other hand, failure to maintain this support could indicate that the breakout was not fully established.

Key technical indicators are currently showing mixed signals for Binance Coin. The Relative Strength Index (RSI) is trending downward, although it remains above the neutral 50 line. Its decline suggests increasing selling pressure. If the RSI continues to fall, it could signal further downward momentum for BNB.

The Chaikin Money Flow (CMF) is also showing a downward trend. Although the CMF is still above zero, its current level of 0.18 indicates that some traders are withdrawing liquidity from the market. This could further pressure BNB’s price if the trend persists.

The outcome of the current retest will be crucial for Binance Coin’s future price movements. If BNB can successfully defend the support level and continue to build momentum, it could target higher price levels.

Analysts are watching for a potential rise towards $598.90, with the possibility of reaching $652.90 if the bullish trend remains intact.

Conversely, if the retest fails and BNB falls below the support level, it might drop to $522.90. This would indicate a possible breakdown of the breakout and a return to previous lower price ranges.

BNB’s current situation highlights the importance of the ongoing retest of the breakout line. The success or failure of this retest will play a significant role in determining BNB’s next price movement. Traders should watch closely for signs of either continued bullish momentum or a reversal to lower levels.

The mixed signals from technical indicators, combined with recent price actions, suggest that BNB’s path forward will be shaped by how well it can hold above the critical support level. If the support holds, BNB could see further gains; if not, a decline to previous levels may be on the horizon.

The total value locked (TVL) on the Binance Smart Chain (BSC) network has decreased from $4.616 billion on August 24th to $4.533 billion at press time. This decline in TVL indicates that more assets are being withdrawn from DeFi protocols on the BSC network, which could potentially increase selling pressure on BNB.