Binance, the world’s largest cryptocurrency exchange by trading volume, recently completed its 28th quarterly token burn event. This event saw over 1.64 million Binance Coin (BNB) tokens, valued at approximately $963 million, permanently removed from circulation. While token burns are typically seen as bullish for an asset’s price due to reduced supply, BNB price remains relatively flat, hovering around $585 at the time of writing.
On-Chain Metrics Suggesting Recovery
Despite the lack of immediate price movement, on-chain data points towards potential future gains for BNB. Social dominance, a metric that tracks the number of mentions a cryptocurrency receives on social media platforms, has seen a noticeable increase this week. This suggests that market participants are once again discussing BNB, potentially indicating renewed interest. Additionally, trading volume for BNB has climbed from 1.58 billion on July 20th to 2.01 billion on July 23rd, suggesting increased activity in the market.
BNB’s Price Target: A Return to $721.80?
Analysts are cautiously optimistic about BNB’s future price movement. Some predict a potential 24% increase, bringing the price back to its 2024 peak of $721.80, which was reached in early June. However, the road to recovery might not be smooth sailing. BNB could face resistance at several price points, including $588, $664, and $677. These levels represent key Fibonacci retracement points based on the decline from the June 6th high to the July 5th low.
Technical Indicators Supporting the Thesis
Technical analysis also offers some encouraging signs for BNB. The Moving Average Convergence Divergence (MACD) indicator, which measures price momentum, suggests a potential bullish trend for BNB. A positive reading on the MACD suggests that underlying momentum is shifting in favor of a price increase.
Support Levels to Watch
While there’s potential for an upswing, it’s important to acknowledge potential downside risks. If the price momentum weakens, BNB could find support at the July 16th low of $554. Additionally, the 23.60% Fibonacci retracement level of the same decline, which sits at $517.80, could also act as a support zone.
Conclusion
The recent BNB burn and positive on-chain metrics suggest that the price could be poised for a rebound. However, several resistance levels and the overall market sentiment could play a role in determining the coin’s future trajectory. Investors should carefully consider all factors before making any investment decisions.
