Binance Coin Price Forms Risky Pattern Ahead of $1 Billion BNB Burn

Key Insights

• Binance Coin price has formed a bearish flag pattern on the three-day chart.
• The network will execute a $1 billion token burn in the next few weeks.
• The number of transactions and active users dropped in the last 30 days.

Binance Coin is stuck in a technical bear market after falling 55% from its October 2021 high. This retreat may continue in the near future as the BNB token is forming a bearish flag pattern ahead of a major token burn.

Binance Coin Price Chart Points to a Steep Crash

The three-day chart shows that the BNB price has slumped after peaking at its all-time high of $1,375 in October last year. This decline has happened during the ongoing crypto market crash.

It has already moved below the 61.8% Fibonacci Retracement level at $553. This retracement level was drawn by connecting the October 2023 low to the highest point on record.

In most cases, rebounds normally happen when an asset moves to the 61.8% Fibonacci Retracement level. As such, the fact that it has moved below it is a sign that bears have prevailed.

The coin is also in the process of forming the second bearish flag pattern since October last year. The first one happened between October 10 and January 28. It then plunged from ~$900 in January to $570, forming the flagpole of the second flag.

The BNB price is now forming the flag section of this pattern. This pattern is in the form of an ascending channel. In most cases, this section is normally followed by a strong bearish breakdown.

On top of this, the token is about to form a death cross, as the spread between the 50-day and 200-day Exponential Moving Averages (EMAs) has continued to narrow. The 50-day average is at $748 while the 200-day average is at $717.

The Average True Range (ATR) indicator has continued to fall and is now at its lowest level since September last year, signaling that volatility has eased.

Therefore, the most likely Binance Coin price prediction is bearish, with the next key target being the 78.6% Fibonacci Retracement level at $466, which is about 25% below the current level.

BSC to Burn Tokens Worth $1 Billion Soon

The bearish BNB price forecast is occurring despite the upcoming BNB token burn, scheduled for the next few weeks.

Data compiled by BNB Burn shows that the network will burn 1.57 million tokens, which are currently worth over $1.018 billion.

This token burn is based on the number of blocks produced in the first quarter, which totaled 2,592,000.

Token burns are usually bullish for cryptocurrencies because they reduce the number of tokens in circulation and its inflation.

In addition to this token burn, BSC burns tokens through the real-time burn, which is based on the fees it collects from handling transactions across areas like decentralized finance and NFTs. This approach has burned tokens worth $218k in the last seven days and $175 million since its inception.

BSC Network Metrics Have Deteriorated

The bearish outlook for Binance Coin is that its key network metrics have deteriorated over the past few months.

For example, data compiled by DeFi Llama shows that DEX protocols in its ecosystem has continued falling, possibly because of the growing Hyperliquid market share.

As the chart below shows, the network handled transactions worth over $29.3 billion in March, its lowest level since April last year. This number has been in a steep downward trend after peaking at $118 billion in October last year. The biggest networks in the ecosystem are PancakeSwap, Uniswap, and THENA.

More data shows that the network handled over 408 million transactions in the last 30 days, down by 5% from the previous period. Its active addresses dropped by 6% to 35.65 million. Also, the total value locked (TVL) in its ecosystem dropped to $5.4 billion from the year-to-date high of $8.2 billion.

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