In brief:
- The team at Binance has completed one of the largest coin burns of BNB to date.
- The Binance Chain community recently released a whitepaper outlining plans to enable smart contracts.
- Binance Coin has its eyes set on erasing all losses experienced in March.
In December of 2018, Ethereum World News hinted that Binance Coin (BNB) was one of those coins every long term crypto investor should have on their radar. Back then, the coin was valued at approximately $4.30. In March 2019, EWN once again pointed out the potential of BNB to break records in the crypto markets and it went on to peak in June of 2019 at a value of $39.70. In the past few weeks, EWN has also been analyzing BNB from a technical analysis point of view. Today, let us explore 3 reasons to be bullish on Binance Coin (BNB) and why it could reclaim $21.
Smart Contracts are Coming to Binance Chain
Firstly, the Binance Chain community released a whitepaper outlining the implementation of Smart Contracts on the blockchain. This new feature will turn Binance Chain into a network similar to, or better than Ethereum. In the document, they explained why smart contracts were the next step in the evolution of Binance Chain.
the community-driven BCDC proposes the idea of a parallel blockchain to the current Binance Chain, called Binance Smart Chain, which will retain the high performance of the native blockchain while supporting an intuitive version of Smart Contracts functionality at the same time. This innovative solution brings the interoperability and programmability of the Ethereum Virtual Machine (EVM) to Binance Chain.
Quarterly BNB Coin Burn to Cut Circulating Supply by Half
Secondly, a few hours ago, the team at Binance carried out one of the largest coin burns in the history of crypto. This was the 11th quarterly coin burn at the exchange and a total of 3,373,988 BNB were forever removed from circulation. This is the equivalent of $52.466 Million in BNB.
This event is in line with the project’s whitepaper to continue with the coin burns till there are 100 Million BNB in circulation from the original 200 Million. The total supply currently stands at 187.5 Million BNB thus indicating that 87.5 Million are scheduled to be burned in the coming months and years.
In a hypothetical situation and using the current market cap of $2.548 Billion, if the reduction to 100 Million BNB was completed today, BNB would have a value of $25.40. Doing the math, there is still room to grow for BNB at its current value of $16.27.
Brief Technical Analysis of BNB
Thirdly, and without adjusting our favorite 6-hour chart of BNB/USDT we have used over the weeks, we observe the following.
- BNB/USDT current value at $16.27 has encountered the $16.33 resistance level.
- Other resistances include $17.52, $18.5 and our target value of $21.
- Its current price is above the 50, 100 and 200 Moving averages thus providing evidence of a bullish future.
- Its short term support is now $15.95 that was identified as a resistance in an earlier analysis.
- MACD and trade volume are all indicating bullish momentum.
- The MFI is high at 71 thus providing evidence for the case that BNB might just break $16.33 and then proceed on some sideways movement before another push-up.
Conclusion
Initially, and due to the Coronavirus crash of mid-March, we were certain Binance Coin (BNB) was headed towards bearish territory for the foreseeable future. However, once the news hit the internet that the exchange had acquired Coinmarketcap, bullish momentum was observed from a TA point of view. Two more fundamental developments of smart contracts and a coin burn have provided additional fuel for the coin’s upward trajectory. Consequently, Binance Coin (BNB) has its eyes set on erasing all losses of mid-March by reclaiming $21.
(Feature image courtesy of Mihai Lazăr on Unsplash.com.)
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.