- Binance coin managed a 10% uptrend despite the crypto crackdown from China.
- The daily chart shows positive signs ahead and more gains for BNB
Binance Coin (BNB), the native coin of the world’s largest crypto exchange, Binance, advanced 10% Wednesday. The BNB/USD pair traded at $367.5 in the European session Wednesday, despite the ‘fear, uncertainty, and doubt’ surrounding China’s ongoing war with all things crypto.
What’s behind the rally?
In hindsight, earlier this year (June 2020), the People’s Republic of China has already shut down a substantial number of Bitcoin mining farms in the southwest of the country. However, the authorities continued to wage war on cryptocurrencies and banned all crypto-related activity on Sep. 24.
As a result of the FUD, Bitcoin lost 8.5%, and many altcoins followed suit, including Binance coin. BNB lost 13%, compliant with the rest of the market.
The latest advance also came in the wake of Bitcoin’s recovery. However, as it often happens, smaller coins adopt the same bias but amplify the price swing. So while Bitcoin put on merely 3% on Wednesday, BNB managed all 10%.
Meanwhile, the exchange behind the digital asset remains fairly stable. Binance’s daily trading volume stands at $17.5 billion, managing over a million transactions daily. The fees on the platform are relatively low, at 0.1% per transaction. Those fees are further cut in half if the transaction commences using the BNB token.
Fast forward to the Binance coin price action; the digital asset broke out of its trading pattern for the past month: the falling wedge. Instead, the latter is a bullish formation that predicts future gains.
BNB daily chart
The falling wedge formation consists of two converging trendlines that envelop the price action, prevent sharp breaks in either direction and drive the price south. As mentioned above, the falling wedge is a bullish predictor, and BNB broke the pattern in an uptrend.
Moreover, the bullish break helped recover the relative strength index (RSI: purple graph at the bottom) and direct it upward. The RSI is an overall indicator of how the traders view an asset value. For example, it shows if they perceive the price as adequate (30-70), oversold (<30), or overbought (>70).
In the early Asian-Pacific session, the token retested the support line at $331 and took off to meet the 20-day exponential moving average (EMA-20; blue wave). If the Binance coin manages to break above it, the wave could provide additional support.
The upcoming sessions will show if Binance can establish a bullish phase despite the worrying signs coming from the Chinese government.