- BNB Chain revealed that its completed its routine quarterly burn.
- If the Funding Rate remains negative, BNB’s price action could turn bullish.
Binance [BNB] had its 26th quarterly burn on the 17th of January, according to a blog post released by the BNB Chain team. According to the post, 2.14 million BNB valued at $636 million were removed from circulation.
This value was higher than the number of coins burned during the last quarter. As of then, the total BNB burned was worth $450 million.
Source: BNB Chain
However, the increase in value could also be linked to the fact BNB’s price increase in the last 90 days. At the time of writing, BNB’s price was $311.38, indicating a 44.71% increase in the last 90 days. Binance began burning tokens in 2017.
Its mission was to ensure that half its supply was removed from the market while a maximum of 100 million tokens were in circulation at any given time.
Selling pressure increases
AMBCrypto looked at BNB from a technical point of view and discovered that the price closed above both the 9 EMA (blue) and 20 EMA (yellow). This position suggests that BNB still had some bullish potential.
However, signals from the Awesome Oscillator (AO) suggest that the price could decrease before any upward run. This was because the AO kept falling. Also, the red histogram bars indicated increasing downward momentum.
So, BNB might drop below $310 in the short term. The Chaikin Money Flow (CMF) also supported this sentiment. As of this writing, the CMF was down to 0.11.
The CMF measures buying and selling pressure over a given period. A move into the positive territory suggests buying pressure which could trigger a price increase. So, since the CMF was negative, it meant that sellers were more active than buyers.
Source: TradingView
BNB could be ready to erase the losses
Despite the potential drawdown, market players were still bullish on BNB. According to AMBCrypto’s analysis of Santiment’s data, the Weighted Sentiment was 2.638.
Weighted Sentiment tracks the negative or positive commentary about a project using the unique social volume. When the metric reads positive, it means the average participant is bullish on the price action
However, a fall into the negative region suggests otherwise. However, it is important to mention that the metric fell, suggesting that the optimism around the coin has reduced.
In the meantime, the Funding Rate had dropped deep into the red area. The negative Funding Rate indicated that the perp price was trading at a discount compared to the spot price.
This also implies that shorts are aggressive. In terms of the price action, this could be bullish for the Binance token.
Source: Santiment
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Should selling pressure continue, the participants might get exhausted at one point.
Also, if this follows a negative Funding Rate, BNB’s price might reverse and possibly head toward $330 for start.
