BNB, the native token of the Binance Smart Chain, saw a decline on Friday, showing a huge red candlestick after opening at around $305 and moving down towards $297.93.
This downward move started with a rejection at $312.53 on Wednesday, creating resistance at the same level. At the time of writing, the price is still showing strong signs of a downward move towards the previous support level of $300.
If this support level does not hold, the price could fall further to the next support level at $263.93. But if support holds, we may see the price bounce back and move higher to create a new high for the year. However, the price is still above the 100-day moving average, which is usually a bullish sign for the price.
Technical indicators point to a continued downtrend for BNB
To figure out where the BNB price might go next, several indicators can be used to examine the chart;
4-hour MACD: We can see that the histogram is below the zero line, suggesting a downward trend.
SOURCE: Tradingview
We can also see that the MACD line has crossed below the signal line, indicating an ongoing bearish trend.
1 day MACD: On the daily chart we can confirm that both the MACD line and the signal line have crossed and are moving towards the zero line, while the histogram is already below the zero line, indicating a further downward move.
SOURCE: Tradingview
4 hour alligator If we use the alligator indicator to look at the chart within a 4 hour time frame, we can see that the jaw, teeth and lips are all pointed down and separated from each other. This has historically been a bearish signal and indicates further downward momentum.
SOURCE: Tradingview
1 day alligator: If you also look at the alligator indicator on the daily chart, you can see that the alligator lip [green line] and the teeth [red line] show signs of cross over the jaw [blue line]which suggests a downward movement
SOURCE: Tradingview
Final thoughts
While the MACD and the Alligator are popular indicators, it should be noted that they are not infallible, and traders often combine them with other technical analysis tools to help them make better trading decisions.
In addition, false signals can occur, especially in erratic or sideways markets. So it is crucial to take the broader market context into account.
Token price struggles to hold support at $300 | Source: BNBUSD on Tradingview.com
Featured image of Dall.E, chart from Tradingview.com
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