Binance Coin (BNB) price is back in the green, with investor interest renewed following news of the largest crypto exchange in the world obtaining a license to run a crypto exchange in Dubai.
The fourth-largest crypto exchange, worth $243 and with $37.5 billion in market capitalization, is looking forward to a short-term bullish wave. With this analysis, traders and investors can prepare for a possibly brief rally to $252.
Based on the four-hour chart, BNB price has just broken out of an inverted head and shoulders (H&S) pattern.
This is a bullish reversal signal that occurs after a prolonged downtrend in the price of a cryptocurrency. It indicates that the BNB sellers are losing momentum and the buyers are ready to take over.
The inverse H&S consists of three consecutive lows, with the middle one being the lowest and the other two being higher and roughly equal, as shown on the four-hour chart.
Traders are advised to trade the H&S after its confirmation. For instance, when the price breaks above the neckline, which is a resistance line drawn by connecting the highs of the two shoulders – at $242 for BNB.
Traders use this pattern to identify a potential change in the market sentiment, which allows them to enter long positions when the breakout occurs. The expected target for the BNB price movement is calculated by adding the height of the pattern to the breakout point, for example, the 4% move as shown on the chart.
The Moving Average Convergence Divergence (MACD) indicator adds credence to the bullish outlook, with a buy signal. Traders often rely on this momentum index to validate the expected bullish wave. As a rule of thumb, the MACD line in blue must flip above the signal line to validate the uptrend.
Notably, the H&S pattern calls for a lot of patience with traders often advised to wait for a retest of the neckline support at $242. As BNB price rebounds from this support, a breakout to $252 will start to gain traction.
If the H&S pattern’s neckline support holds, traders may want to look out for potential delays at the 200-day Exponential Moving Average (EMA). However, if BNB price continues with the uptrend undeterred by the possible selling pressure at $245, gains to $252 would be a matter of when and not if.
Binance has been granted the Operational Minimum Viable Product license to offer crypto exchange services tailored for institutional and approved retail investors in Dubai.
The leading exchange will offer the services under Binance FZE, its Dubai subsidiary, according to the announcement.
The development comes after Binance’s interest and efforts to get a provisional MVP license in March 2022 as well as a preparatory MVP license in September of the same year.
Binance said that users who qualify to trade on the new platform will do so “knowing they’re under investor protection and market assurance standards tailored specifically for the virtual asset sector,” the statement reads in part.
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