Disclaimer: The following analysis is the sole opinion of the writer and should not be considered investment advice
Bitcoin seems to have found some temporary support in the $40.5k region and rally to $42.6k at press time. Binance Coin also found demand in the $413-$417 region and recorded a gain of nearly 10.6% in the 40-hour period since.
The $480-$486 zone will be the next resistance area for Binance Coin.
Source: BNB/USDT on TradingView
$417 is the long-term support for BNB, while $413 represents a 61.8% retracement of BNB’s move from $254 to $669. On lower timeframes, the area $455 (cyan box) is where sellers have been strong and were able to force a quick move from $455 to $415.
Over the past few hours, Binance Coin has been able to rise above the $455 supply zone, shifting the short-term outlook for Binance Coin from bearish to bullish.
In the event that BNB does not see a single candle close below $450, there is still a chance the price will continue to move up. The $480 and $486 levels offer short-term targets for the price.
The entire $470 to $510 area didn’t see much trading activity as BNB slid down, meaning sellers were a lot stronger. Only the $461 level can force a return. Therefore, it is possible that BNB will quickly rally to $510 if it can climb above $470 on strong volume.
Theoretical basis
Source: BNB/USDT on TradingView
When BNB tested $413 for the second time in the past week, the MACD formed a lower low while the price closed lower. This bullish divergence was followed by the MACD forming a bullish crossover and quickly climbing above the zero line.
The CMF also shows capital inflows into the market.
Inference
Volume is high as BNB surges north and that happens again if BNB breaches $470. Short-term momentum is on the bulls side and the former supply zone at $455 seems to be has turned to demand.
This presents a high risk buying and trading opportunity considering how thin the $470-$510 area is in terms of declining volume.