As a seasoned crypto investor with over a decade of experience in this wild and unpredictable market, I must say that the recent surge of BNB has caught my attention like never before. I remember when BNB was just a token for trading fees on Binance’s platform, now it’s breaking new records and hinting at an “altseason” as CZ so eloquently put it.
Today, Binance Coin (BNB) stands out among top cryptocurrencies, surging by approximately 22.50% over the past 24 hours, hitting an all-time peak of nearly $794 on December 4th.
In comparison, the crypto market is up around 3%.
CZ hints at crypto “alt” season
The upward trend for BNB began following a cryptic tweet by Binance co-founder Changpeng Zhao, known as “CZ,” on December 3, which suggested the beginning of an “altseason.” During this period, alternative cryptocurrencies typically perform better than Bitcoin (BTC) in terms of percentage increases.
In other words, over the last fortnight, the Bitcoin Dominance Index (BTC.D) – a measure comparing Bitcoin’s market capitalization with that of all other cryptocurrencies – has dropped from approximately 61.53% to around 54.73%.
During this span of time, Bitcoin’s market value has settled approximately at a level of $1.91 trillion, while the total market capitalization of alternative cryptocurrencies (altcoins) has experienced a 36.50% increase to reach $1.59 trillion. This trend suggests that investors are currently adopting a risk-taking approach, aiming to maximize their returns.
Recently, Binance Coin (BNB) has been gaining from this bullish trend, as its cryptocurrency market dominance has increased by 18.41% compared to December 2.
Over the past seven days, I’ve witnessed a remarkable surge in XRP‘s price, soaring beyond 125%. Not one to be left behind, Tron (TRX) has experienced an equally impressive spike, managing to post gains of over 120% in merely two days. As a result, it’s once again found its place among the top-10 cryptocurrencies by market capitalization.
Short liquidations boost BNB prices upward
It seems like the increase in BNB’s price might be partially driven by heightened action in the futures market. Here, traders who wagered on a price decrease (short sellers) experienced more forced sales (liquidations), while those predicting an upward trend (long positions) fared better.
starting December 3rd, the BNB futures market has witnessed a significant short liquidation amounting to approximately $5.48 million, almost twice as much as the $2.72 million in long liquidations. This lopsided liquidation trend suggests that a potential short squeeze could be influencing the increase in BNB’s price value.
In simpler terms, a short squeeze happens when investors who predicted the price would drop have to buy back the asset at a higher cost because they’re compelled to do so due to market conditions, causing the price to escalate further.
BNB price confirms breakout — What’s next?
Currently, the surge in BNB’s price is a part of its ongoing breakout phase within the established cup-and-handle (C&H) chart pattern.
Over a span of several years, a “cup” shape was developed, symbolizing a prolonged accumulation phase. Subsequently, a slight retreat, or what can be referred to as the “handle,” took place, falling just beneath the resistance level of approximately $650.
Currently, BNB’s price has surpassed the upper line (neckline), which indicates a successful breakout. This upward movement may imply additional growth, as the breakout target is determined by combining the height of the “cup” with the position of the neckline.
According to this trend, it’s possible that the price of BNB might reach up to $2,500 by the year 2025, if the current bullish trend continues during the ongoing altcoin season.
Remarkably, Tron has recently followed a pattern similar to the ‘Cup and Handle’, surging more than 200% following its breakout.
This piece is designed primarily to provide information, rather than offering legal or financial guidance. Please note that the perspectives, ideas, and opinions shared in this article may not align with those held by CryptoMoon.
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2024-12-04 15:51