Binance Executes Record Token Burn: Will BNB Price Rise?

Binance Chain has executed its 31st burn, eliminating 1.58 million BNB tokens worth $914 million to decrease the supply to 100 million. Currently trading at $580, BNB faces bearish conditions but potential upward movement if it breaks resistance. Market sentiment remains cautious, but imminent upgrades may positively influence the token’s value.

Binance Chain has conducted its 31st quarterly token burn, permanently eliminating 1.58 million BNB tokens, valued at approximately $914 million. This significant action is part of Binance’s strategic goal to reduce the total supply of BNB to 100 million, thereby increasing the token’s scarcity and potential value over time.

The token burning mechanism, established by the BEP95 proposal, utilizes the BNB price and the number of blocks produced on the Binance Smart Chain to determine quarterly burn volumes. Initially, the total supply of BNB was 200 million tokens; through consistent burning, the supply has now decreased to below 146 million, contributing to deflationary pressure on BNB, which currently has a market capitalisation of $81.65 billion.

Presently, BNB is trading around $580, experiencing a bearish trend after encountering resistance at $600. The price is below critical moving averages, complicating buy opportunities. However, the MACD indicator shows potential resistance against further selling, and a downtrend break could lead BNB towards the $635 region.

Caution remains advised, as market sentiment appears slightly bearish, evidenced by a long/short position ratio of 0.9616 and recent liquidations indicating that $400,000 in long positions were liquidated compared to merely $48,460 in short positions. Upcoming technical upgrades in April, including the Lorentz deployment to reduce block times, may enhance BNB’s appeal and support price improvement.