The ongoing price boom in the Binance Coin (BNB) market is painting a classic bullish chart pattern with an upside target of $560.
Dubbed as Cup and Handle, the pattern appears when the price forms an advance that appears like a U-shaped trend (Cup). That follows up with a formation of a descending channel range (Handle). A breakout above the Handle range typically leads to an upside continuation, with a bullish target at a length equal to the Cup's size.
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So it appears that BNB has undergone a price trajectory that looks like the Cup and Handle pattern. Furthermore, the cryptocurrency's latest rally, accompanied by an increase in trading volumes, took its prices above the Handle range—a breakout—that raised the possibilities of bullish continuation ahead.
As a result, should the BNB price rally sustain, it will eye a run-up towards the Cup and Handle breakout target near $560. Conversely, if the price falls below the Cup resistance (~$437), it would risk invalidating the entire bullish setup.
BNB price fundamentals
The latest BNB price rally appeared after Binance, via its blockchain project Binance Smart Chain (BSC), launched a $1 billion fund to accelerate adoption across the entire crypto industry. This earmarks $300 million for projects building decentralized applications atop BSC.
Traders typically view incubation events backed by blockchain projects as bullish for their native assets. Such events prompt developers to build new projects on dedicated public/private ledgers, which boosts the demand for their in-house tokens.
For example, in early October, Solana, a public base-layer blockchain protocol, announced over $5 million worth of rewards and seed funding for developers participating in its global hackathon called Ignition. The news helped to push the price of SOL, Solana's native token, up by 35%, as Cointelegraph covered.
BNB appeared to have gone through a similar bout of speculation.
Santiment, a crypto data tracking service, also detected a rise in BNB accumulation across wallets that already hold millions of dollars worth of tokens. So-called Binance Coin whales bought about 412,000 BNB in the past two weeks, thus adding 8.7% more tokens to their existing holdings.
The BNB accumulation among rich investors surged despite warning signs from regulators in some countries.
Related: Globe-trotting Binance looks to Ireland for ‘centralized’ headquarters
Binance also remains under investigation by several agencies in the United States, which has prompted several hedge funds, including Tyr Capital and ARK36, to either stop or scale down trading on their crypto exchanges.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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