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Binance Coin Forms Crucial Sell Signal: TD Sequential
Binance’s Binance Coin (BNB) has been on a tear over the past few weeks. In the span of about two weeks, the coin has doubled against Bitcoin, shocking many traders.
The coin is up around 30% in the past three days alone, rallying despite a drop in the price of leading cryptocurrencies.
BNB’s resilience comes as Binance has rolled out the Binance Smart Chain, a blockchain that runs alongside the original Binance Chain. What sets the two networks apart is that the new one can facilitate smart contracts compatible with the Ethereum Virtual Machine.
“Created to run parallel to Binance Chain, BSC enables the creation of smart contracts for tokens on the Binance-branded blockchain. It also introduces an all-new staking mechanism for BNB, one of the world’s top cryptocurrencies,” a press release read on the matter.
Despite this fundamental development, Binance Coin may be technically poised to reverse.
The leading cryptocurrency recently formed a “sell 9” candle against Bitcoin, a Telegram channel tracking the Tom Demark Sequential indicator noted on Monday morning.
Such TD Sequential signals are seen when an asset is poised to reverse to the downside.
Historical instances of the indicator forming signals can be seen in the chart below. The chart shows that the indicator has had good accuracy in the past.
Chart of BNB's price action against Bitcoin over the past few weeks with Tom Demark Sequential candle readings and levels from a Telegram channel tracking the indicator. Chart from TradingView.com
Pivot to DeFi
While Binance Coin did form this signal, analysts think the coin can stay afloat due to Binance Chain’s ongoing pivot to DeFi.
Kelvin Koh of the Spartan Group recently commented on BNB’s potential to rally amid the ongoing fundamental trends for the coin:
“7/ For $BNB, this creates a constant demand for holding/staking the token making it an attractive asset to own. Meanwhile fees that accrue from the exchange continue to burn existing supply. I expect $BNB to claw back the underperformance YTD as a result.”
Others are optimistic about the coin’s prospects as it attempts to claw at some of Ethereum’s market share.
Featured Image from Shutterstock Price tags: BNBUSD, BNBBTC, BNBETh Charts from TradingView.com Despite DeFi Pivot, Binance Coin (BNB) Just Formed a Pivotal Sell Signal