(Akash Girimath – FXStreet)
– Binance Coin price delays its breakout from the head-and-shoulders pattern.
– A breakdown of the neckline at $275.94 reveals forecasts of an 18% crash to $225.26.
– A daily candlestick close above $307.5 will create a higher high and invalidate the bearish thesis.
Binance Coin price is at an inflection point which could result in a steep correction if sellers take control. However, buyers are also in a position where they can seize control and reverse the trend.
Binance Coin ready for big moves
Binance Coin price has formed a bearish reversal pattern since July 23. This technical formation is known as a head-and-shoulders pattern and contains three swing highs, with the central one being the tallest (the head) and the ones on either side shorter and of comparable height (the shoulders).
The swing lows of these peaks can be connected using a horizontal trend line, which forms a neckline. A break below the neckline is a signal for traders to go short. Although Binance Coin price tried breaking below the neckline on September 1, the buyers stepped in and triggered a frenzy of bullish momentum.
This move has postponed the bearish outlook. Regardless, the setup forecasts an 18% downswing to $225.26, obtained by measuring the height of the central peak and adding it to the breakout point at the neckline.
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This puts the target for Binance Coin price at $225.26, but investors need to pay attention to the $243.14 support barrier which could prematurely halt the sell-off.
While things are looking gloomy for Binance Coin price, a hasty move from buyers that triggers a bounce from the neckline at $275.94 could sidestep the bearish fate.
The buyers could take this one step further and create a higher high relative to $294.20, which will not only indicate a weakness for bears but also invalidate the bearish thesis. This development could further see Binance Coin price attempt a recovery rally all the way up to $336.
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