BNB Possible Double Bottom Trading PlanTLDR:
• BNB is on the verge of breaking out the range high in a possible Double bottom reversal.
• Above the range high is a supply zone between 256 – 266 USD.
• I consider this supply zone as another layer of resistance.
• Wait for a retest of the range high as support and for green dots on the TTM Squeeze indicator before betting the farm on BNB.
Background:
• Between the 5th of June and the June 12th BNB lost 30% of its dollar value.
• On June 12th, BNB reached the selling climax and set the range low at 220$.
• On June 13th and 14th BNB rallied to make the range high at 252$.
• On June 28th, BNB tested the range low as support.
• Until today BNB wasn’t able to successfully break out of the range.
Supply Zones:
• BNB’s downward move was in a “drop, base, drop” pattern. This pattern created two supply zones above the range high.
• The first supply zone is between 256 -263 USD.
• The second Supply zone is between 274 -281 USD.
• Until these supply zones are exhausted BNB’s uptrend can be challenged.
Double Bottom Pattern:
• A double Bottom is a bullish reversal pattern.
• The double bottom is confirmed only after a break above the neckline.
• It is not clear yet if we are in a range or in a double bottom. However, it makes no difference as far as the trading plan is concerned.
Trading plan:
• I am writing this trading plan assuming that we do have a double bottom and that BNB will break above the range high. If the breakout fails, I will look for another entry and update you.
• Pay attention to the supply zone just above the range high. This supply zone will create bearish pressure on BNB and may push the price down, possibly below the range high.
• Don’t buy the breakout. Buy the retest of the range high as support.
• Take profit or move your SL before the second supply zone between 273 – 280 USD.
• You mnust look at the volume candles to verify the breakout. A breakout on low volume is, most likely, doomed from the beginning.
• You can use the TTM squeeze indicator (by Beardy_Fred) as confluence. Wait for the green dots as a sign that volatility is back. However, this is a lagging indicator. To make the best use of this indicator, check the LTF.
Trade Idea:
• Entry: 252 USD (only after a retest and green dot)
• SL: 243 USD
• Target: 308 USD
• R: R: 1:5
• TP: 273, 208
NFA
What do you think? Please share in the comments.
Best wishes.
