BNB/USD
Binance Coin (
BNB) is witnessing a vertical rally, after having risen sharply in the past few days. The RSI has risen above 94, which suggests the up-move is extremely overbought in the short-term.
BNB/USDT daily chart. Source: TradingView
When traders fear missing a rally, they continue to buy at every higher level. Usually, such a rally ends with a blow-off top after the last bull has purchased. When the price starts to turn down, the momentum traders are the first to jump off the ship and that deepens the correction.
The long wick on today’s candlestick suggests traders are booking profits at higher levels. If the price dips below the 38.2% Fibonacci retracement level at $260.5707, it will suggest the bulls are not buying the dips anymore. That could pull the price down to the 61.8% retracement level at $206.1262.
A break below this support could lead to panic selling from short-term traders. The pair may then complete a 100% retracement of the entire rally, resulting in a drop to $118. Conversely, if the bulls push the price above $348.6969, a move to $400 is possible.