There are indications that Binance Coin (BNB) could experience a significant surge, as an inverse head and shoulders pattern emerges on its chart, signaling a bullish breakout. For this pattern to materialize, BNB needs to breach critical resistance levels.
The formation of the inverse head and shoulders pattern features rounded bottoms marking the left shoulder, head, and right shoulder, with the neckline positioned at approximately $560. Traders are closely monitoring this level, as a successful breakthrough would confirm the bullish outlook.
If BNB manages to surpass the neckline, the pattern suggests a target price of around $725, which signifies a potential increase of 19.45% from the current price of about $545. This target is determined by measuring the distance from the head to the neckline, serving as the breakout range.
Crucial Support and Resistance Levels
BNB is currently hovering near $545, encountering resistance at the $560 neckline. The price’s behavior around this level will be pivotal in validating the inverse head and shoulders breakout.
A close above $560 could trigger a sustained bullish trend, with $725 emerging as the next major resistance barrier.
On the downside, immediate support is visible around $530, a level that has demonstrated resilience in recent price movements. A drop below $530 could expose a substantial support zone near $383, potentially weakening the bullish scenario.
Source: TradingView
Market Sentiment and RSI Analysis
With the Relative Strength Index (RSI) hovering around 54, market momentum appears neutral, avoiding extreme overbought or oversold territory, thereby allowing flexibility for price fluctuations.
Given RSI’s slight positioning above 50, there is room for bullish sentiment expansion if buying pressure intensifies.
Recent data from Coinglass as of September 18, 2024, reveals a BNB OI-Weighted Funding Rate of -0.0083%, indicating a mild bearish bias. This rate suggests a slight advantage for short positions, but a shift in sentiment could transpire if bulls gain dominance.
At the time of reporting, BNB was trading at $545.22, with price oscillations reflecting market uncertainty.
Source: Coinglass
According to a recent analysis by CryptoCrypto, traders can anticipate a risk-to-reward ratio of 1:3, proposing an optimal entry just above $545, a target price of $600, and a stop-loss set at approximately $525.
This trading strategy will activate only if BNB conclusively closes its daily candle above $545, serving as confirmation for bullish momentum.