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Binance Coin (BNB) : Still no signs of slowing down
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[Overview / Introduction]
Binance Coin (BNB) was mentioned in our earlier post linked below and so far has increased around 200% in value. It is now showing signs of increasing further with a Bull Pennant Pattern which I will explain below, alongside some of the information from our last post that explains what BNB is and why this token is important in the Cryptocurrency space.
If we hold above monthly support and break weekly resistance area then BNB is setting itself up for a potential massive increase.
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[BNB Token & Binance Ecosystem]
What is Binance?
Binance is the worlds largest cryptocurrency exchange. Binance was founded by Changpeng Zhao, a developer who had previously created high frequency trading software.
1. What is Binance Coin (BNB)?
Binance Coin is the crypto-coin issued by Binance exchange, and trades with the BNB symbol. Binance coin runs on the Ethereum blockchain with ERC 20 standard, and has a strict limit of maximum 200 million BNB tokens.
2. How Is Binance Coin’s Supply Controlled?
Binance held an ICO for BNB (basically the same as a IPO ), originally selling 100,000,000 coins to those that wanted to participate. The founding team was allocated 80,000,000 coins and the other 20,000,000 went to initial investors.
3. How Is Binance Coin Distributed?
Each quarter the Binance exchange uses 20% of its profits to buy back BNB. Think of this like a share buy back that a traditional company would engage in. Binance will then destroy these coins (this is called a coin burn), in turn reducing the supply until 100,000,000 BNB remains outstanding. All in all, half of the originally issued coins will be destroyed.
4. Why is this positive for BNB ?
The rules of Supply & Demand tell us that when the demand of an asset outweighs the currently supply, we often see a increase in prices.
In BNB's case, first of all the tokens supply will be lowered over time with the BNB Coin burn described above: almost by half. Cryptocurrencies and Crypto Trading continues to increase in popularity and with Binance positioning itself as the #1 Crypto Exchange Worldwide one can only expect the demand to use BNB Token will increase, because BNB is used to power the Exchange Ecosystem, with features such as fees discount & digitized loaning & staking the growing user base will want to use more & more BNB token to lock in their fee discounts and receive potential rewards.
Today more staking was announced which seems the perfect timing for more growth:
facebook.com/binance/posts/1405163846484636
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[Learning the Bull Pennant Pattern]
Bull Pennants are a little different to Bull Flags but are almost identical in appearance and are traded basically the same.
The most important factor in identifying any flag or pennant pattern is the clear "staff" or "flagpole"; there should be a straight run upwards leading up to the pattern or it is not a valid pattern.
After the straight run upward price starts to Zig Zag between two converging trendlines forming a tight wedge (it can be slanted, or even symmetrical) until the price "breaks out" above the upper trendline signifying a possible continuation in trend upwards.
Bull Flags and Bull Pennants have the highest success rate out of any pattern and work extremely well when paired with long term support & resistance areas. Enter at the invalidation point of the pattern (A), second entry on the bullish retest (B). Pennants that are “tighter” have higher success rates, look for patterns forming on top of long term resistances (not below) to increase probability of success also. Pattern height is measured and added to swing low before breakout for possible target.
Sometimes large size traders can generate liquidity by faking out under the pattern support as we can see on this current example with ADA. The liqudity generated by triggering stop losses underneath the pattern can fill large position sizes for whales and is a good indicator for a long once the price confirms support back inside the pennant .
Some key points:
• PRICE MUST MOVE STRAIGHT UP BEFOREHAND
• MIN 2 Touches each side on almost symmetrical looking wedge
• HIGH SUCCESS RATE
• BEST ENTRY IS often when price fakes out under support (Marked at A)
• Pattern height is measured and added to swing low before breakout for possible target
Binance Coin (BNB) was mentioned in our earlier post linked below and so far has increased around 200% in value. It is now showing signs of increasing further with a Bull Pennant Pattern which I will explain below, alongside some of the information from our last post that explains what BNB is and why this token is important in the Cryptocurrency space.
If we hold above monthly support and break weekly resistance area then BNB is setting itself up for a potential massive increase.
--------------------------------------------------------------------------
[BNB Token & Binance Ecosystem]
What is Binance?
Binance is the worlds largest cryptocurrency exchange. Binance was founded by Changpeng Zhao, a developer who had previously created high frequency trading software.
1. What is Binance Coin (BNB)?
Binance Coin is the crypto-coin issued by Binance exchange, and trades with the BNB symbol. Binance coin runs on the Ethereum blockchain with ERC 20 standard, and has a strict limit of maximum 200 million BNB tokens.
2. How Is Binance Coin’s Supply Controlled?
Binance held an ICO for BNB (basically the same as a IPO ), originally selling 100,000,000 coins to those that wanted to participate. The founding team was allocated 80,000,000 coins and the other 20,000,000 went to initial investors.
3. How Is Binance Coin Distributed?
Each quarter the Binance exchange uses 20% of its profits to buy back BNB. Think of this like a share buy back that a traditional company would engage in. Binance will then destroy these coins (this is called a coin burn), in turn reducing the supply until 100,000,000 BNB remains outstanding. All in all, half of the originally issued coins will be destroyed.
4. Why is this positive for BNB ?
The rules of Supply & Demand tell us that when the demand of an asset outweighs the currently supply, we often see a increase in prices.
In BNB's case, first of all the tokens supply will be lowered over time with the BNB Coin burn described above: almost by half. Cryptocurrencies and Crypto Trading continues to increase in popularity and with Binance positioning itself as the #1 Crypto Exchange Worldwide one can only expect the demand to use BNB Token will increase, because BNB is used to power the Exchange Ecosystem, with features such as fees discount & digitized loaning & staking the growing user base will want to use more & more BNB token to lock in their fee discounts and receive potential rewards.
Today more staking was announced which seems the perfect timing for more growth:
facebook.com/binance/posts/1405163846484636
--------------------------------------------------------------------------
[Learning the Bull Pennant Pattern]
Bull Pennants are a little different to Bull Flags but are almost identical in appearance and are traded basically the same.
The most important factor in identifying any flag or pennant pattern is the clear "staff" or "flagpole"; there should be a straight run upwards leading up to the pattern or it is not a valid pattern.
After the straight run upward price starts to Zig Zag between two converging trendlines forming a tight wedge (it can be slanted, or even symmetrical) until the price "breaks out" above the upper trendline signifying a possible continuation in trend upwards.
Bull Flags and Bull Pennants have the highest success rate out of any pattern and work extremely well when paired with long term support & resistance areas. Enter at the invalidation point of the pattern (A), second entry on the bullish retest (B). Pennants that are “tighter” have higher success rates, look for patterns forming on top of long term resistances (not below) to increase probability of success also. Pattern height is measured and added to swing low before breakout for possible target.
Sometimes large size traders can generate liquidity by faking out under the pattern support as we can see on this current example with ADA. The liqudity generated by triggering stop losses underneath the pattern can fill large position sizes for whales and is a good indicator for a long once the price confirms support back inside the pennant .
Some key points:
• PRICE MUST MOVE STRAIGHT UP BEFOREHAND
• MIN 2 Touches each side on almost symmetrical looking wedge
• HIGH SUCCESS RATE
• BEST ENTRY IS often when price fakes out under support (Marked at A)
• Pattern height is measured and added to swing low before breakout for possible target
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