 burns $916M in its 31st quarterly burn, fueling deflationary pressure.BNB chart shows a bullish double bottom){kind=link}
Key Insights:
- BNB completes its 31st quarterly burn, removing $916M worth of tokens.
- The double bottom pattern signals potential upward momentum, with a target price of $760.
- BNB’s supply is continually reduced, enhancing scarcity and boosting bullish sentiment.
Binance Coin (BNB) has recently completed its 31st quarterly token burn, removing 1.58 million BNB, worth approximately $916 million at the time of the burn. This burn contributes to the deflationary dynamics of the cryptocurrency, reducing the total supply and potentially increasing the value of the remaining tokens.
BNB’s Aggressive Deflationary Strategy
The Binance Coin network has implemented an aggressive deflationary model since its inception. With over 60 million BNB tokens already burned, worth approximately $37 billion, the network has removed a substantial portion of its total supply. This supply reduction mechanism, paired with Binance’s auto-burn system, continues to be one of the most aggressive deflationary models in the crypto industry.
Binance token burns are intended to slowly decrease the total number of BNB over the course of the quarter and aimed at reducing the circulating supply of BNB to 100 million tokens. Moreover, since the introduction of BEP95, which is a real time burning mechanism, implemented on gas fees, more than 259,000 BNB have been burnt through this mechanism.
Currently, BNB’s total supply is around 139 million BNB. With the completion of the 31st burn, the total number of tokens burned now exceeds 59 million, making a notable addition to the deflationary efforts in the BNB chain.
However, with 40.89 million BNB yet to be burned, supply reduction will continue till all tokens are exhausted, creating a scarcity in the market and possibly giving the token value.
Bullish Technical Pattern Emerges for BNB
Binance Coin is also besting price action bulls, in displaying a bullish technical setup. In the BNB/USDT daily chart, a bullish reversal pattern, called the double bottom formation, indicates a trend change from bearish to bullish. This pattern shows two lows above $510 level, then again there was a move up to neckline resistance at $590.
The structure of the double bottom shows that BNB has found strong support in the vicinity of $510 – $520 and is attempting to punch above the important resistance at $590. As long as price sticks above this point, it is likely to behave strongly and break out, with a chart target of $760–$770.
If BNB can close above the neckline at $590 with strong volume, the breakout would be confirmed, and the price could see an upward move of over 30%. Currently, BNB trades around $580 and traders are closely watching for $590 resistance to determine if the bullish trend will continue.
Key Indicators Supporting the Bullish Outlook
RSI (Relative strength index) is now at 45.59 near the middle of the neutral 50 mark. If BNB can rise above the 50 threshold, it will confirm the rise in buying pressure and further confirm the bullish thesis of BNB.
The MACD (Moving Average Convergence Divergence) indicator also shows a potential bullish crossover, as the MACD line begins to turn upward and crosses above the signal line. This positive shift in momentum adds to the case for an upward move.
The Cumulative Volume Delta (CVD) is trending to show buying pressure, and the volume is starting to rise, suggesting that it can be a breakout. There will be a need for positive volume as it increases and may turn out to be the fuel for the bullish trend.
Resistance and Price Targets
BNB traders are watching $630 as a crucial price for the asset. CryptoRand states that if BNB can break above the $630 resistance with strong volume, it would be a complete bullish reversal. This price level provides a key resistance point, and a breakout above it could drive prices even higher.
Should BNB break $630, the next upside target lies between $700 and $760, based on the height of the double bottom formation. Sustained bullish momentum, supported by strong technicals and a tightening supply, suggests BNB may be poised for a strong rally if market conditions align.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
Olivia Stephanie is a FinTech enthusiast with a keen understanding of financial markets. Her passion for economics and finance has led her to explore emerging blockchain technology and cryptocurrency markets.