BNB Burns 2 Million Tokens: Will Binance Price Predictions of $330 Come True? (crypto-news-flash)
- BNB burned over 2 million tokens this week, worth over $600 million, leaving holders optimistic that the price will hit $330 despite weakened on-chain factors and technical indicators.
- High selling pressure and a dip in the market sentiment spell doom for the token in the short term, but other factors, such as increased adoption with recent BitPay integration, offer a lifeline.
The BNB chain had its quarterly burn on January 17, where a total of over two million tokens were permanently removed from the circulating supply.
The 26th quarterly $BNB token burn has been completed through #BNB Auto Burn.
2.14m #BNB has been burned
View burn details
https://t.co/X87qqzEdFv pic.twitter.com/0zaLCkfs39
— BNB Chain (@BNBCHAIN) January 17, 2024
According to a blog post announcing the burn, the ecosystem eliminated 2,141,487.27 BNB or 1.4% of the total circulating supply, worth around $636 million at the time. This was around the same number of tokens that the ecosystem burned in Q4 last year, although, at the time, they were worth $450 million. BNB has shot up over 40% in the past three months.
This quarter saw the highest number of tokens burned since the 14th burn, in which the ecosystem eliminated 3.6 million tokens. That was back in January 2021 when the price hovered around $40. As the BNB faithful will remember, the token shot up almost immediately after that burn to hit its all-time high of $686 four months later.
When it launched seven years ago, the BNB Chain, back then known as the Binance Smart Chain, pledged to eliminate 100 million tokens through quarterly burns, half its total supply. Every quarter since then, the Foundation behind the network has honoured this promise, and following the 26th burn, the circulating supply is now at 149 million.
In addition to the quarterly burns, the BNB Chain also runs the Real-Time Burn mechanism in which a small portion of the transaction fees are automatically burned.
Will BNB Hit $330?
The burns are a significant factor in the price of BNB. Having eliminated over 50 million tokens in 26 rounds, they continue to dig away at the supply of the token, making every remaining token more valuable.
However, despite the latest burn, the token’s price has mainly remained unchanged over the past 24 hours, where it has only changed by +0.39%.
In the past week, the coin has been range-bound around $310, with an intra-weekly high of $319 and a low of $299. This is despite the steadily high volume at an average of over $1 billion (although it’s down today by 19%).
Technical indicators show that the momentum has slowed down in the past month. The Chaikin Money Flow, the Awesome Oscillator and the Exponential Moving Averages all point to a token lacking in any strong demand, and that could dip first below the all-important $300 level before it picks up any upward momentum.
Market metrics also paint a grim picture. BNB’s open interest in the derivatives market and its funding rate (graph below) have been on a free fall since mid-December.
However, the token could be boosted by continued adoption. This week, crypto payments service BitPay announced that it would add BNB to its list of payment tokens, enabling the token’s holders to pay directly with their crypto at retail outlets globally.
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