Binance Coin ' href="https://www.newsbtc.com/dictionary/coin/">Coin tests a classic support area for a potential long-term rebound. Source: BNBBTC on TradingView.com
A coin is a unit of digital value. When describing cryptocurrencies, they are built using the bitcoin technology and have no other value unlike tokens which have the potential of software being built with them.
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The BNB/BTC exchange rate reached a classic support area, as shown in the chart above. The pair this week rebounded off the rectangular price floor, repeating the beginning of a fractal that last sent its prices soaring by almost 290 percent.
That is partially due to Bitcoin’s overbought status. The flagship cryptocurrency’s latest rally pushed its prices up from late $10,000 to as high as $24,300 this month. Meanwhile, it also raised the possibility of massive sell-offs at the hands of whales. Such a scenario often leads traders to look for hedging assets inside the crypto space, benefiting coins like BNB.
BNB/BTC weekly RSI is at 32, which places the pair in an ideal accumulation zone. Therefore, traders could increase long exposure on BNB against BTC, with Fibonacci levels in the chart above serving as potential upside targets.
Meanwhile, Mr. Zhao noted that BNB could achieve similar results in the dollar-pegged markets.
“BNB’s ATH in the Dec 2017/Jan 2018 run was $24 (when BTC made $19700),” he said. “BNB had since broken that ATH in July 2019 ($39), before BTC made a comeback. It now looks like it’s going for it again.”
The weekly RSI on BNB/USD charts was above 70, reflecting its overbought status in the medium-term. That amounted to a downside correction.