- BNB Chain has sent $1.2 billion in tokens into dead wallets, reducing its supply in circulation to 137.73 million.
- Technical signals such as the RSI and MACD are reflecting a positive momentum with a price target of $1,250.
- Futures volume trading rose by 49% indicating an increase in trader confidence as they take up new positions.
BNB Chain has completed its 33rd quarterly burn. It removed approximately 1.44 million BNB tokens, equivalent to approximately $1.2 billion from the market.
This supports the long-term deflationary supply model for the token. After the announcement, BNB was recording some positive gains with traders taking up positions as they expect the token to rise towards the $1,200 to $1,250 range.
Reducing Total Supply
The team at BNB Chain confirmed the burn on the BNB Smart Chain (BSC) through the automatic burn system. They are aiming to reduce the overall supply of the token every quarter. The systematic removal of the token from circulation makes it more scarce and leads to an increase in its value in the long term.
The 33rd burn is based on the long-term roadmap of the protocol, according to the official X post by the BNB Chain. The end goal is to reduce BNB tokens in circulation to 100 billion. With the latest burn event, the total BNB supply in circulation is now 137.73 million.
A Solid Base
According to the TradingView 4-hour chart, BNB has established a strong base at a price level above $1,138. This is near the VWAP of between $1,138 and $1,155. This range has served as a support and purchase zone in the last few sessions.
Fibonacci retracement levels (based on the October high) show that the levels of resistance are at $1,165, $1,195, and $1,250. A bullish recovery could be established by a breakout above the $1,165 price. In addition, a continued of above $1,195 would lay the groundwork for a run towards $1,250.
In contrast, the most important support area is at the 1.618 Fib extension, which is around $984. This was the zone from which BNB rebounded in mid-October. Hence, market structure is bullish on the long-term as long as price is above $1,100.
Fib. and VAWP. Source: TradingView
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Early Signs of Recovery
The Relative Strength Index (RSI) is at 56.7. This implies that there is room for further gains before the price reaches the overbought zone. The RSI trend is gradually rising since mid-October, which proves the fact that the market is back to its buying power.
In the meantime, the MACD has established a bullish crossover, indicating that it is picking up positive momentum. The histogram has moved within the green range, which is a sign of increased bullishness.
In the history of the BNB chart, such setups have resulted in rallies of 5% to 10% when accompanied by high volume. Provided the same scenario repeats itself, BNB may target the resistance zone of $1,200. Then, test the $1,250, which corresponds to the upper Fibonacci range.
MACD and RSI. Source: TradingView
A Spike in Futures Activity
According to the information provided by Coinglass, there was a significant spike in the activity of BNB derivatives. Volume went up by 49.3% to reach $5.76 billion.
This was accompanied by an increase of 6.46% in the open interest to reach $1.83 billion. These indicators demonstrate that the speculative interest is following the upward direction of the spot market.
The spike in volume is an indication that traders are expanding their exposure in the wake of the burn announcement. When open interest soars, it means that new positions are being opened. This indicates that traders are not liquidating or closing trades in the short run.
These trends usually represent confidence that further increases in price are possible. It is an indication that retail and institutional investors are also expecting BNB to take the next big step. This could be a move to $1,200 and $1,250.
Source: Coinglass
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