Binance destroys $971 million worth of BNB, will the price of BNB take this opportunity to rise?

The BNB Foundation has completed its 28th quarterly BNB token burn, removing 1,643,698.8 Binance Coin (BNB) tokens, valued at approximately $971 million, from circulation. This event comes shortly after the ecosystem celebrated its seventh anniversary.

Token Burn Mechanism

This burn is part of the BNB auto-burn mechanism, which aims to eliminate 100 million BNB tokens, or half of its total supply.

This mechanism operates independently of the Binance centralized exchange, with figures reported quarterly. The quarterly burn programme has been active since October 2017.

Impact on BNB Price

Unlike previous burns, this event occurred directly on the Binance Smart Chain (BSC) amid the ongoing BNB Chain Fusion.

The burn tokens are being sent to the wallet named “blackhole.”

BNB Chain Burn Transaction ID. Source:BscScan

However, the price of BNB did not show significant movement following the burn.

A popular account noted that the BNB burn is a routine activity by Binance, continuing until the total supply is reduced to 100 million tokens from 200 million.

Additional Burn Mechanism

In addition to the auto-burn, the BNB ecosystem also employs a real-time burn mechanism, introduced with the BEP95 update.

This mechanism is based on gas fees and has burned nearly 234,000 BNB tokens since its inception. Following this report, BNB trading volume increased by 28%, accompanied by a small value surge, indicating heightened attention on the token.

Token burning reduces the total supply, potentially increasing the value of the remaining tokens.

Market Reactions

BNB community members are hopeful for positive price action, although the price remains below $600 after briefly testing this psychological level.

Binance researchers suggest market corrections can provide opportunities to enhance portfolios.

Technical indicators on the daily timeframe show a bullish trend, with the Relative Strength Index (RSI) above the mean threshold of 50 and the Moving Average Convergence Divergence (MACD) above the signal line.

However, the RSI's downward inclination indicates falling momentum, which could result in a red candlestick for BNB.

BNB/USDT 1D Chart. Source:TradingView

BNB Performance

Despite the burn routine, BNB's price saw a marginal drop in the last 90 days but remains up by 92% year-to-date, following a significant surge in March 2024.

Currently, BNB is trading at an average price of $600, with a circulating supply of over 145.9 million and a market cap of $87.5 billion.

It is still down by 16% from its all-time high of $720.67, recorded on 6th June 2024.

Competitive Landscape

BNB maintains its position as the fourth-largest cryptocurrency, though Solana (SOL) is closing the gap. Solana's price increased by more than 34% in the last 30 days, compared to BNB's 2% rise during the same period.

This growth has boosted Solana's market cap to $83 billion, trading at an average price of $178.76, up by 2.64% in the last 24 hours.

CoinMarketCap Data