- BNB faces a critical resistance at $560, with a potential breakout target of $725, a 19% price increase.
- The RSI shows neutral momentum, while a breakout above $545 could spark a bullish rally towards $600.
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Binance Coin [BNB] is showing signs of a potential bullish breakout, with a clear inverted head and shoulders pattern forming on its chart. This classic bullish reversal signal suggests that BNB could see a strong upside. But only if it manages to break above a key resistance level.
The left shoulder, head, and right shoulder are marked by a rounded bottom with the neckline located around $560. Traders are closely watching this level as a break above it will confirm the bullish scenario.
If BNB manages to break above the neckline, the pattern would point to a target near $725, which would be a 19.45% increase from the current price of around $545. This level is based on the distance from the head to the neckline, which has been calculated as a potential breakout range.
Key support and resistance levels
BNB is currently trading around $545 and is facing neckline resistance at $560. This level is crucial in determining if the inverse head and shoulders breakout is confirmed.
If the price settles above $560, it could trigger a sustained bullish rally with $725 acting as the next major resistance.
On the downside, the immediate support is around $530, a level that has held during the recent price action. If BNB falls below $530, the next important support area is around $383, which could lead to a weakening of the bullish case.
RSI and Market Sentiment
The Relative Strength Index (RSI) is currently hovering around 54, indicating neutral market momentum. The RSI is neither indicating overbought nor oversold, leaving room for prices to move in either direction.
However, with the RSI just above 50, bullish sentiment could strengthen if buying momentum picks up.
Coinglass data shows that as of September 18, 2024, the BNB OI weighted funding rate was -0.0083%, indicating a slightly bearish market. This funding rate suggests that short positions may have a slight advantage. But if bulls dominate, market sentiment could quickly reverse.
At press time, BNB is trading at $545.22, and fluctuations around this price point indicate uncertainty in the market.
Based on the recent analysis, a 1:3 risk-reward ratio can be expected with an ideal entry above $545, a target of $600 and a stop loss around $525.
However, this trade setup will become active only if the BNB/USD pair closes on a daily basis above $545, which would suggest confirmation of the bullish momentum.
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