Risk sentiment is clearly red this session, which makes bearish technical setups in crypto one to watch for potential short-term opportunities. That makes this rising wedge in Binance Coin one to watch for the next few sessions.
BNB/USD Daily
It’s an all red market this session, and it’s likely we’re seeing profit taking ahead of a very busy central bank schedule next week. All of the major central banks will be giving their final monetary policy statements for 2021, and if we start to see more hawkish rhetoric collectively from the group, today’s risk-off move could be just the start of a broad move lower in risk assets like crypto.
If crypto assets do take a turn lower, Binance coin (the utility token for the Binance network-the second largest blockchain by total value locked) is the market I’ll be watching as it forms a simple technical pattern that could draw in sellers.
On the four hour chart above, we can see the bears already took control in December as the bulls failed to break the major resistance area around $650. The market actually dipped all the way down to retest the $500 major psychological area, where the bulls bought back quickly.
We are now seeing may be turning out to be a dead cat bounce in the works, and what could be a rising wedge pattern forming, which if broken to the downside, could spark another strong momentum move lower. And with a daily average true range of around $45, the next move lower could take the market well beyond the $500 handle if risk aversion sentiment ramps up on hawkish central bank rhetoric (or even rising pandemic-related fears).
So, that’s what we’re BNB/USD for that downside break and if the overall environment stays averse. But what do you all think? Will traders continue to lean risk-off into next week’s busy central bank schedule? Will BNB bulls give back a chunk of their 2021 gains. Let me know in the comments section below!
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