The Elliott Wave Principle (EWP) tracks the progress of financial markets via what Mr.Elliott called “waves.” The underlying principle is that markets are governed by human emotion, generating waves of fear, greed, hope, despair, and other feelings.Each wave reflects social/investor sentiment changes, and the form is repetitive and thus predictive.Waves are market moves in any time frame, from seconds to years to decades.These market moves are mostly made up of a five-waves movement in price, followed by a three-waves step in either direction, up or down.They are the most efficient way for financial markets to progress in time.Albeit interpretive, the EWP can significantly help us in determining what is most likely next on many timeframes, and I have been able to successfully apply this method for Bitcoin (BTC), Ethereum (ETH), and Solana (ADA), see here .
Therefore, it is time and appropriate to start applying this time-tested, accurate and reliable tool to the 4th largest cryptocurrency, by market cap: BinanceCoin (BNB).See figure 1 below.From figure 1, which is monthly, I can learn that BNB most likely completed (blue) Primary Wave-III in November of last year.From the EWP, we know after wave three (III) come wave four (IV) and wave five (V), and wave-IV has to be at least made up of three smaller waves (a, b, and c).Thus, BNB should now be in wave-b of wave-IV, as shown by the blue arrows.
B-waves are very tricky by nature, and a general rule is they likely retrace around 50% of the prior wave-A.That would mean the current bounce that started January 24th should last for several more weeks, provide several up and down moves, and target ideally around $515+/-40 (red target zone).In my next update, I will zoom in on the price chart to detail the most likely path BNB will take to get there.Once wave-b completes, wave-c of wave-IV should commence and drop the price back $300-250.
From there, wave-V can begin and target into the $1000s.You can see there are several technical indicators (TIs) above and below the actual price chart with red dotted arrows.These arrows depict the negative divergence that had been building up going in the November 2021 all-time high: price was moving higher but on A) less strength (RSI5); B) less momentum (MACD and FSTO); and C) less money flowing into the cryptocurrency (MFI14).The latter is crucial because liquidity, which supports buying power, obviously is the main driver.
Besides, the TIs peaked in the spring of 2021, which they often do at the top of 3rd of 3rd waves, supporting the EWP shown.There’s always one caveat to any analysis, and in this case, my assessment will be wrong if the price of BNB drops below $205 on a monthly closing basis.That level is, obviously, critical support, and if BNB drops below it, I will change my POV accordingly (“When the facts change, I change my mind.What do you do, sir?”).
In the meantime, I will diligently track BNB’s progress daily for my premium crypto trading members and report back in a few weeks here..