Binance burns over $950 million in BNB, will price cross $700?
- Binance removed over 1.64 million BNB from circulation, early on Monday, per official announcement.
- BNB social dominance and volume recovered on Tuesday, per on-chain data.
- BNB hovers around $585, awaiting a catalyst to break past key resistance at $664.
Binance Coin (BNB) price is nearly unchanged in the past month. Data from TradingView shows BNB price is $585 at the time of writing. On-chain metrics support a thesis of gains in BNB, as social dominance and volume climbs this week.
Binance burns $963 million in BNB tokens
The largest exchange by volume announced a burn of 1,643,698.80 BNB tokens worth over $963 million, on Monday, July 22. The burned BNB tokens are permanently removed from circulation, reducing the asset’s supply and the selling pressure.
The official announcement by the exchange confirms that the burn was the 28th quarterly token burn event and at the time of burn, the approximate value was $971 million.
BNB burn by Binance.
Typically, reduction in an asset’s circulating tokens has a net positive effect on price. However, the recent burn failed to catalyze gains in BNB. BNB trades around $585 at the time of writing. Santiment data shows two on-chain metrics, social dominance and volume have increased this week.
Social dominance measures the mentions of a token among market participants across social media platforms. BNB’s social dominance is close to 1% on Tuesday. Volume has climbed from 1.58 billion on July 20 to 2.01 billion on July 23, as seen in the Santiment chart below.
The two on-chain metrics support a thesis of recovery in BNB price.
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Social dominance and volume
BNB price eyes return to 2024 peak of $721.80
Binance Coin (BNB) trades around $585 at the time of writing. Binance Coin is likely to extend gains by 24% and revisit 2024 peak of $721.80, seen previously on June 6.
Binance’s native token could face resistance at $588, $664 and $677, the 50% and 78.6% Fibonacci retracement of the decline from June 6 top of $721 to July 5 low of $454, and the upper boundary of the Fair Value Gap (FVG) respectively.
The momentum indicator, Moving Average Convergence Divergence (MACD) supports a recovery in BNB, it indicates positive underlying momentum in Binance Coin’s price.
BNB/USDT daily chart
BNB could find support at July 16 low of $554, and $517.80, the 23.60% Fibonacci retracement level of the mentioned decline.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
