On November 1, BNB Chain completed its 29th quarterly token burn, effectively lowering the overall supply of Binance Coin (BNB). This event has sparked bullish sentiment among investors eager to see if the reduced supply can drive BNB’s price higher. Here’s an analysis of the factors at play.
BNB Chain’s Token Burn Fuels Investor Optimism
In a recent update, BNB Chain announced it had burned 1.77 million BNB, valued at over $1 billion. This burn included 1.71 million tokens via the Auto-Burn process and an additional 62,569 BNB specifically for BTokens. The burns are part of BNB’s long-term goal of reducing its total supply to 100 million tokens, which could increase scarcity and boost the coin’s value.
Following this burn, the Balance of Power (BoP) indicator on the daily chart moved higher, showing potential bullish momentum. When BoP readings rise, it suggests that buyers have control, often signaling price growth. Currently, BNB trades around $576, with bulls hoping this trend continues.
Positive Market Sentiment for BNB
On-chain data from Santiment shows a positive Weighted Sentiment for BNB, reflecting optimism among investors. Weighted Sentiment uses social media mentions to assess market perception, where positive readings suggest a favorable outlook. The current sentiment may support demand as more traders anticipate a price rise.
Key Levels: Will BNB Reach $606?
Technically, BNB is showing bullish signs after defending the $573 support level. If this level holds, the next target is $596, with the potential to rally further to $606. An inverse head-and-shoulders pattern on the daily chart adds to the case for a potential reversal to bullish momentum.
However, if bearish pressure increases, BNB could dip below $563, with a further decline toward $543.
