Binance (BNB/BTC) Technical Analysis for 09/20/2017 – Stuck in Consolidation

Binance is down more than 8% against bitcoin, even as the latter cryptocurrency faces its own setbacks. The downtrend remains intact on short-term time frames but the longer-term ones reflect consolidation.

Binance is an up and coming Chinese exchange but it has its own cryptocurrency. These tokens were created by an Ethereum smart contract some time ago and a total of 80m BNB coins is kept in reserve, all of which belong to the team. A total of 200m coins were created initially so there are 120m BNB coins waiting to be traded.

However, the ban on ICO funding and the shutdown of bitcoin exchanges also threatens to put the existence of Binance at risk, although there is still some observable demand from other markets.

On the 15-minute chart, it can be seen that the moving averages have completed a downward crossover while Binance is completing a pullback from its latest breakdown. Volume has been subdued as traders are holding out for more catalysts, but stochastic is pulling higher to signal a return in short-term bullish pressure.

On the hourly chart, it can be seen that Binance recently fell through near-term support and is setting its sights lower. Stochastic has room to climb on this one so the correction might need to be completed before bearish momentum kicks back in.

Lastly, the daily time frame shows a bearish flag pattern, which is typically considered a continuation signal. A break below this flag or pennant could confirm that another steep drop is underway, especially since stochastic is signaling that bears have enough energy to push Binance lower.

Geopolitical risk is expected to return to the financial markets and this typically benefits bitcoin more than other cryptocurrencies like Binance. The shutdown of exchanges in China could also have a larger impact on rival digital assets that have a relatively low market, as bitcoin volumes and activity could be revived by other markets like Japan and South Korea.

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