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Binance Coin’s Next Big Price Rise and Why It Depends on This ‘Triangle’
- BNB was trading above the support line of its symmetric triangle pattern
- BNB remains at risk of falling as its funding rate was negative
The recent market recovery has caused Binance Coin [BNB] rebound sharply from the support line of its symmetric triangle pattern.
This pattern is formed when the price of an asset reaches multiple lower highs and lower lows. This indicates that the asset’s price continues to be pressured between buyers and sellers, with buyers pushing prices higher to meet resistance and sellers pushing them lower to find support.
When this happens, the asset in question is said to be consolidating within a range.
Will he rally toward his resistance?
At press time, BNB was valued at $583.84 after a 3% rise from its $566 support level. To gauge whether the altcoin can rise towards the triangle’s upper trendline and above it, a good starting point is to consider market sentiment.
According to Sanctity data, the currency’s weighted sentiment was 0.607 and in an uptrend at press time. The positive value of the metric suggested that the BNB market enjoyed positive sentiment among its participants.
Source: Santíment
BNB’s main momentum indicators also confirmed this optimistic outlook. At press time, its Money Flow Index (MFI) was 65.61 and rising, showing that market participants favored the accumulation of BNB over the distribution of their holdings.
Likewise, the altcoin’s Chaikin Money Flow was in an uptrend and above the zero line at 0.07. This pointed to a constant flow of liquidity into the BNB market. If this indicator continues to rise, it would mean an increase in demand for the cryptocurrency.
Source: BNB/USDT on TradingView
If sentiment remains bullish, buyers could push BNB price above the triangle resistance line. The coin’s price could rise to $596 and then $643.
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BNB remains at risk
On the other hand, if this bullish projection is invalidated and bearish pressure increases, BNB price could break below the triangle to trade around the $520 level.
Source: BNB/USDT on TradingView
The possibility of this happening is increased by the importance of the altcoin’s negative funding rate in recent weeks.
In fact, according Currency Currency, this currency has recorded predominantly negative funding rates since April 23rd. On May 15, BNB funding rates fell to a multi-month low of 0.106%.
The last time the currency funding rate was this low was in February.
Source: Coinglass
When an asset’s funding rate is negative, more traders hold short positions. This suggests that more traders expect the asset’s price to fall and are buying the asset with the expectation of a price recovery.