Key Insights:
- Binance Coin price has plunged by 35% from its highest level in October last year.
- The token remains below the Supertrend indicator and is about to form a death cross pattern.
- The network will burn tokens worth over $1.27 billion in the coming weeks.
Binance Coin price has retreated by 35% from its highest level on October 13. Technical indicators suggest that the token may continue its downtrend despite the upcoming large $1.2 billion token unlocks.
Binance Coin Price Technicals Indicate It Has More Downside
The daily timeframe chart shows that the Binance Coin price has retreated in the past few months. It mirrored the performance of other cryptocurrencies like Bitcoin and Ethereum.
This chart indicates that the token is approaching the formation of a death cross pattern, as the 50-day and 200-day Exponential Moving Averages (EMAs) are nearing their bearish crossover. A death cross is one of the most common bearish continuation patterns.
The token has remained below the Supertrend indicator, indicating that bears are currently in control. Also, the token has moved below the 50% Fibonacci Retracement level at $940.
Most importantly, the Binance Coin price has formed a bearish flag pattern, a common continuation sign. This pattern consists of a vertical line and an ascending channel. Its flagpole started forming on October 12 and ended on November 20th.
It is now in the channel section, which may lead to a strong bearish breakdown in the coming weeks. If this happens, the next key support level to watch will be at $791, its lowest level in November. A drop below that price will lead to more downside, potentially to the 78.2% retracement level at $693.
On the flip side, a move above the key resistance level at $940, the 50% Fibonacci Retracement level will point to more upside.
BSC Chain is Facing Major Headwinds
The bearish Binance Coin price prediction is also supported by its fundamentals, which are showing some weaknesses. Third-party data indicate that activity has declined in the past few months, partly due to the recent crypto market crash.
For example, the number of transactions in the network has dropped by 7% in the last 30 days to 400 million. The network fees have also dropped to $13.2 million.
More data shows that the total value locked (TVL) in its network dropped sharply in the past few weeks, moving from a high of $13.3 billion in October to the current $9.2 billion.
Meanwhile, Binance Coin’s futures open interest has rebounded from $1.26 billion on December 26 to $1.4 billion as of today. It remains much lower than last year’s high of $2.7 billion. The open interest occurred after the large liquidation event that happened on October 10.
BNB Token Burn to Offset the Decline
The ongoing token burns will likely offset the Binance Coin price’s crash. Data shows that the network has burned 307.5 BNB tokens worth over $272,285 in the last 7 days.
This real-time token burn is derived from the daily fees collected by the network. Data shows that the network has burned 280,259 BNB tokens worth over $248 million using this approach. The most significant unlock is expected to occur in the coming weeks, when it incinerates over 1.37 million tokens, worth over $1.27 billion.
This burn is part of the quarterly burn that is based on the Binance Coin and the block rewards. This occurs every quarter, with the goal of ultimately reducing the circulating supply from 137 million today to 100 million.
The estimate is that the network will burn 1.37 million tokens, worth approximately $1.21 billion, in the current quarter.
Summary
Technical analysis suggests that the Binance Coin price may experience a strong bearish breakout in the coming weeks, as it has formed several patterns. At the same time, its fundamentals, like the waning decentralized finance TVL and stablecoin supply, can contribute to the downtrend.
On the positive side, the network will burn tokens worth over $1.2 billion in the coming weeks, reducing the supply.
Crispus is a distinguished Financial Analyst at, bringing over 12 years of expertise in cryptocurrency markets, specializing in Bitcoin and altcoins. Renowned for his sharp insights at the nexus of market trends and breaking news, Crispus delivers actionable analysis to empower investors. His work is prominently featured across leading platforms, including BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, cementing his reputation as a trusted voice in the financial world.
