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Monday, October 18, 2021

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Is it a good time to buy Binance Coin (BNB)?

The crypto market continues to be volatile, thus seeing significant bearish lashes. However, the quick response from buyers still holds a long-term bullish view. Binance Coin currently does nothing more than follow this trend, but is it a good idea to buy right now? Find out below.

At the time of writing BNB is trading at $ 363.40, accumulating a loss of 2.67% in the last 24 hours and 15.32% in the last 7 days. Its market capitalization of $ 60,663 million makes it the 5th position in the Crypto Online ranking.

Although the losses have undoubtedly been relevant, when we review fundamental data as we did yesterday, we realize that at the moment the force of the fall is being enveloped by the intention to buy.

Changpeng Zhao, CEO of Binance, assures that in the long run what is happening is a simple dip or dip, a situation in which strong hands generally take advantage to accumulate.

And to show that those who trust in technology take advantage of these falls to buy, we have the tweet from Nayib Bukele, President of El Salvador. He announced that the country that now uses Bitcoin as legal currency, has bought 150 more BTC, when the price was around $ 43,000.

We have already reviewed in a general way what is happening in the ecosystem, and how it is possible that the fall is already being stopped by those who take advantage of low prices to accumulate. But, will Binance coin benefit from it? Is it worth buying? Let’s see it next.

Advantages and disadvantages of BNB

Let’s start by reviewing the good

  • Token of the largest exchange in the world: This alone is an advantage that could continue to escalate the price as Binance grows around the world, and it will undoubtedly continue to do so as long as the crypto market does too.
  • Main vehicle within the Binance Smart Chain: Also known as BSC, it is the 2nd largest DeFi network at the moment, and Binance Coin is the way to pay transaction fees within this network, so users are forced to buy this cryptocurrency.
  • Benefits of using it within the exchange: From avoiding operating fees, to rewards for holding or staking them, Binance incentivizes its users to use BNB, which generates a feedback spiral and higher demand for the token.
  • Deflationary mechanism: Through the burning of tokens, Binance decreases the supply of BNB on a quarterly basis, which can only lead to a price increase if demand is sustained or increased.

Now let’s get down to business, and it is always worth checking both sides of the coin.

  • Regulatory issues: Probably the biggest hurdle for Binance currently, and that is that as countries require the exchange to ban some services to users, the token’s usage may also drop in tandem.
  • Partially centralized: Its development, burning, promotion, etc., is largely controlled by the exchange. In addition, some situation quite compromising for the exchange, would seriously jeopardize the trust of the token.

There are clearly fewer disadvantages, and one of them is unlikely to interfere with the development of the token, however, it is very important to take them into account.

Having reviewed this, let’s see what the price action tells us.

Technical analysis of Binance coin to determine if it is a good time to buy

In the weekly candle chart we see how the fall is forming part of a larger retracement, which occurred later after a major bullish rally.

Already at the point where the price was at the end of August, it was necessary for a correction to occur. What is happening right now is still a totally normal and healthy process.

The moving averages EMA of 8 and SMA of 18 are crossed to the upside, which tells us that the medium-term trend is in the hands of buyers. Currently these averages are working as dynamic supports.

It is quite likely that the decline is about to find its bottom, perhaps on the support near $ 340. The most likely scenario tells us that it is a good idea to buy Binance Coin currently.

However, it is still worth waiting for confirmations, and I will show you what they are below.

BNB vs USDT weekly chart.  Source: TradingView.
BNB vs USDT weekly chart. Source: TradingView.

There is still a downside risk

In the daily time frame we observe a clear short-term bearish direction, formed by lower and lower maximums and lows.

The 200-day moving average was broken, putting the strong major uptrend in jeopardy.

The 8-day EMA and 18-day SMA moving averages are also bearish, following the short-term trend.

Today the price is getting support on a demand zone close to $ 340, and although an upward transition has not yet begun from the current point, the greater trend makes this scenario win odds in its favor.

To think that the bulls have regained control, new lows and higher and higher highs must be formed on the daily chart.

As long as it does not occur, the support at $ 340 remains in jeopardy. Further down the next support is at $ 322.

Technical analysis of Binance coin to determine if it is a good time to buy.  Source: TradingView.
Binance Coin technical analysis to determine if it is a good time to buy. Source: TradingView.

All our publications are informative, so in no case should they be followed as investment advice.

Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: Tammy@oicanadian.com Phone: +1 513-209-1700

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