Crypto: Binance Sets Record Burn – Is BNB Poised For A Surge?

Binance Chain has just completed its 31st quarterly token burn operation, permanently removing 1.58 million BNB from circulation, equivalent to 914 million dollars. This strategy could well propel the price of the world’s fifth largest crypto in the coming weeks.

Binance Chain permanently burns $914 million worth of BNB tokens

This Wednesday, Binance Chain carried out a massive destruction of 1,579,207 BNB tokens, as confirmed by BscScan data.

This operation is part of Binance ecosystem’s long-term strategy aiming to gradually reduce the total supply of BNB until reaching 100 million tokens.

This automatic burn mechanism, introduced by the BEP95 proposal, is not arbitrary. It calculates the number of tokens to be burned each quarter based on the BNB price and the blocks produced on the Binance Smart Chain.

The goal is clear: to increase the scarcity of the token and potentially its value over the long term.

According to CoinGecko, the total supply of BNB was initially 200 million tokens. Thanks to these regular burns, this number has now fallen to less than 146 million, creating significant deflationary pressure on the world’s fifth largest cryptocurrency by market capitalization, worth $81.65 billion.

Technical outlook and crypto market signals

BNB is currently trading around 580 dollars, in a bearish phase after hitting resistance at 600 dollars. The token is trading below its key moving averages, illustrating the challenges buyers need to overcome.

Despite this unfavorable technical setup, some indicators suggest opportunities. The MACD indicator shows signs of resistance against selling pressure. A break of the downtrend could open the way towards the 635 dollar zone.

The derivatives data however call for caution. The long/short position ratio of 0.9616 reveals a slightly bearish sentiment in the market.

Recent liquidations confirm this trend, with 400,000 dollars of long positions liquidated against only 48,460 dollars of short positions.

This massive burn comes as BNB Chain prepares major technical upgrades for April, with the deployment of Lorentz which will significantly reduce block times. These developments could enhance the ecosystem’s attractiveness and ultimately support BNB’s price.