Swarm Intelligence Set

Binance Coin burning boosted the price

February 3, 2020   Binance Coin

Binance Coin (BNB) doesn’t require a prolonged introduction: it is indisputably the most popular exchange cryptocurrency that was one of the superstars of 2019. The gains that BNB has put up in a span of 365 days amount to 165%, which is 29% higher than that of Bitcoin. Moreover, BNB was more fruitful than literally all top 10 cryptocurrencies, except for Bitcoin SV, the price action of which is shrouded in controversy.

All those positive results were obtained solely through the effort of Binance’s CEO Changpeng Zhao and his team that had turned their brainchild into the largest cryptocurrency trading ecosystem in the world, which now includes the decentralized trading platform and a host of trading and financial instruments on the centralized one. Without going further into BNB’s fundamental prowess, let’s just say that this coin is worthy of not only trading but also holding, as it is most likely to continue rising in value throughout 2020.

Those who take an interest in the development of the Binance ecosystem should be aware of the quarterly burn of BNB with the purpose of eventually cutting the overall supply of coins by 50%, thus avoiding the inflation and incentivizing the demand.

According to the latest report, published on January 19 in Binance Blog, the exchange had carried out a burn of 2,2 million BNB, which equates to $38,8 million. This event is yet to find a reflection on the charts since it coincided with a pullback after a two-weeks long uphill hike that ended in Binance Coin forming a bullish flag, which is regarded as a trend continuation pattern.

1-day BNB/USDT chart

Despite the fact that traders see a gradual decline of trading volume, which is a natural phenomenon during the pullback, this decrease isn’t abrupt or inconsistent, which suggests that the bulls are still packing enough power to take the price action out of the flag to the upside.

In order for that to happen, the price of BNB needs to turn the resistance at $18 - $18.3 into support, thus confirming the continuation of the rising trend.

The exchange coin had already tested the $18.3 resistance four times, as shown on this 4-hour BNB/USDT chart, but to no avail. Therefore, it could be stated with a relative degree of certainty that Binance Coin will approach this area within the period of the next 5 to 7 days to test it once again.

4-hour BNB/USDT chart

The mentioned BNB burn could provide that final incentive, needed for a successful breakout and a subsequent trend continuation. A failure to do so will result in the BNB price retracing to $16.5 - $16 where it would consolidate before making another attempt at conquering this height.

1-day BNB/USDT chart

Binance Coin’s current resistance struggle coincides with the 0.618 Fibonacci retracement level, passing which should end up in BNB testing the $20 level. However, it is of immense importance for the 9th cryptocurrency to keep making higher lows in order to maintain confidence in its bullish intentions.

Summarizing the above, it would be best to enter a trade above $18, and only after the price passes traders’ remorse to the upside - the stop-loss should obviously be placed below the current support line.

Author: Alex Paulson for Crypto-Rating.com

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