Binance’s 2 Million Token Burn: Evaluating the Potential Accuracy of BNB Price Forecasts

Binance's 2 Million Token Burn: Evaluating the Potential Accuracy of BNB Price Forecasts

BNB Chain’s 26th Quarterly Burn

BNB Chain recently completed its routine quarterly burn, with the 26th burn taking place on January 17th. According to a blog post by the BNB Chain team, a total of 2.14 million BNB, valued at $636 million, were removed from circulation.

This burn saw an increase in value compared to the previous quarter, where the total BNB burned was worth $450 million. The surge in value is attributed to the significant price increase of BNB over the last 90 days, reaching $311.38 at the time of writing, indicating a 44.71% surge.

Technical Analysis and Price Action

AMBCrypto’s technical analysis reveals that BNB closed above both the 9 EMA (blue) and 20 EMA (yellow), suggesting ongoing bullish potential. However, signals from the Awesome Oscillator (AO) indicate a potential decrease in price, with the AO falling and red histogram bars indicating increased downward momentum.

Despite the short-term potential drop below $310, the Chaikin Money Flow (CMF) supports a positive sentiment. As of now, the CMF is at 0.11, suggesting increased selling pressure. A move into positive territory typically indicates buying pressure that could trigger a price increase. With the CMF negative, it implies active selling.

Market Sentiment and Future Outlook

Market players remain bullish on BNB, with AMBCrypto’s analysis of Santiment’s data showing a Weighted Sentiment of 2.638. Weighted Sentiment tracks the sentiment around a project based on unique social volume. While the metric fell, signaling reduced optimism, it remains positive overall.

Simultaneously, the Funding Rate has dipped into the red area, indicating a negative Funding Rate. This suggests that the perp price is trading at a discount compared to the spot price, potentially signaling a bullish trend for the Binance token. If selling pressure persists, participants might exhaust, and following a negative Funding Rate, BNB’s price could reverse, heading towards $330 initially.