The BNB Foundation recently concluded its 29th quarterly token burn, removing more than 1.77 million BNB (equivalent to approximately $1.07 billion) from circulation. This continuous token burning approach aims to decrease the supply of BNB tokens and boost their value for holders. Past token burns have frequently triggered market responses as well.
For example, the 28th token burn resulted in a modest 0.5% price increase to $596, accompanied by a 22% rise in trading volumes. Similarly, the 27th token burn in April led to a 5% surge in Binance Coin [BNB] value after 1.94 million BNB tokens were burned, valued at $1.17 billion.
Consequently, with each token burn event, the scarcity of BNB tokens increases, potentially creating conditions for a significant market movement.
Is BNB on the Verge of Breaking its Major Resistance Level?
Currently, BNB is trading at $584.70, showing a slight appreciation of just under 1% within 24 hours. Analyzing the daily chart, BNB appears to be approaching a critical resistance level around $606—a level it has faced difficulty breaking in the past.
Nevertheless, the price is forming an ascending triangle pattern, which is typically considered a bullish signal.
If BNB manages to surpass the $606 level, it could attract heightened buying interest, potentially initiating a new uptrend. On the contrary, if the resistance proves strong, Binance Coin might experience a pullback, likely testing lower support levels in the $560 range. Therefore, this level serves as a vital battleground for the token.
An Indication of Growing Market Interest?
In addition to the token burn, trading activity has seen a notable surge.
Derivatives trading volumes increased by 21.97% to $697.49 million, while Open Interest experienced a 2.3% rise, reaching $543.60 million. This surge in trading volume and Open Interest suggests a rising interest among traders, possibly in anticipation of a significant market move.
Elevated trading volume often signifies increased market participation, and a simultaneous rise in Open Interest generally signals strong confidence among traders. Consequently, this heightened activity might hint at an impending market breakthrough—whether upwards or downwards, contingent on BNB’s ability to breach the $606 level.
BNB Liquidations – Shorts May Need to Stay Cautious
Recent data indicated $156.02k in long liquidations compared to $100.96k in short liquidations, indicating a slightly bullish sentiment prevailing in the market.
As Binance Coin inches closer to its resistance level, short positions have decreased, signaling caution among bearish investors. In the event of BNB breaking through this level, we might witness a surge in short liquidations, potentially fueling further upward momentum.
Could this Token Burn Spark the Momentum BNB Requires?
With Binance Coin nearing a critical resistance level and trading volume on the rise, the 29th token burn could potentially act as a turning point. Past token burns have instigated bullish trends, and a breakthrough above $606 could pave the way for a new market rally.
However, a failure to surpass this level may result in consolidation or a minor decline in BNB’s value.