When will BNB reach 1k?
Binance Coin (BNB) is going to reach 1K. We make the argument that this epic milestone might be hit sooner rather than later.
As Ethereum hitting 5K is now an inevitability, attention turns to price milestones of competing cryptocurrencies.
Human beings love a psychological round number and there’s no price more significant than the 1K level being approached by BNB.
Let’s take a look at the significance of 000 psych levels and then let me offer an opinion on the BNB/USD price action.
The similarities between Binance Smart Chain (BNB) and Ethereum (ETH)
Whether it’s fair or not, Binance Smart Chain and its native BNB coin is always going to be linked to Ethereum (ETH).
It’s true that Binance Smart Chain was initially derived from the Ethereum network, but there’s also no denying that it has now evolved into an entirely separate beast.
As DeFi moves further into the mainstream, people searching for a cheaper yield farming alternative have let the fact that BSC’s network is completely centralised slide, instead happy to be paying a fraction of the costs found on Ethereum.
Due to BSC’s centralised nature, the network is able to operate at lower costs AND faster speeds than Ethereum.
With only 21 network validators that are in one way or another centrally controlled by Binance itself, BSC has its flaws.
But gas fees are literally a fraction of what is being paid to use Ethereum and as with absolutely everything else in life, everybody has a price.
Even those ingrained in the cryptocurrency community like to talk a big game when it comes to their decentralised ideals.
But the numbers going through BSC and the price of the BNB token show that everyone (including myself, the Cub Finance fanboi), likes money just that little bit more.
Why is the 1K psychological level significant for BNB?
Psychological levels in crypto are nothing more than round numbers that human beings can easily relate to.
Support and resistance on a chart is nothing more than an area where you’re likely to see a large number of buyers and sellers coming together to do business and psych levels are prime examples.
Prices such as the 1K BNB level are important because they look cool and invoke an emotional response.
The fact that BNB is about to make a fresh all time high and enter price discovery adds another level of significance to the 1K level.
Without any other previous turning points to act as support/resistance zones, traders are going to look for whatever they can relate to in order to set targets.
Because these 000 levels are psychologically significant, price action around them will be closely watched.
Yep, the self-fulfilling prophecy of phycological round numbers acting as support/resistance in crypto strikes again.
BNB to $1000, soon
So with that little human psych lesson in the bank, let’s finally take a look at the BNB charts.
My trading strategy will always be to start on the higher time frame charts such as the daily and then zoom in from there.
This allows me to ensure I’m always trading in the direction of the overriding trend, and don’t get caught swimming against the incoming tide thanks to counter-trend noise.
Let’s start with the daily chart.
Binance Coin (BNB/USD) Daily:
I’ve simply placed horizontal lines at $100 intervals to highlight just how well BNB traders respect psychological round numbers.
As you can see, this grid may as well have been tailor made for the BNB price action and shows just how powerful trading around round numbers can be.
Price is currently rangebound, pinging between $600 and $700, exactly as it was doing back in April.
With the $700 resistance zone also the current all time high BNB price, another level of significance is added.
Now zoom into the hourly and let’s have a look at the intraday price action.
Binance Coin (BNB/USD) Hourly:
As per my simple support/resistance trading strategy, if we’re in a bullish trend on the daily, then I want to only be trading from the long side.
So after BNB found support at $600, I’ve taken the last area of short term resistance on the hourly and waited for a retest.
You can see that as it almost always does, price has respected this intraday zone and offered a clean entry with minimal (zero) drawdown.
Could this be a prelude to the inevitable 1K breakout in BNB?
Final thoughts on BNB reaching 1K
Again, everything is so bullish across the crypto space that BNB reaching 1K just seems like an inevitability.
At the very least, you can make a pretty compelling argument that price is more likely to hit 1K than it is $500.
And as a trader, applying risk management to those sorts of probabilities is all that should matter.
Best of probabilities to you.
Direct from the desk of Dane Williams.
Why not share a chart or leave a comment with your opinion on when BNB will reach 1K? All comments that add something to the discussion will be upvoted.
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