The BNB price has crashed for five consecutive weeks despite the network having strong fundamentals. Binance Coin token fell to a low of $503 this week, its lowest level since September 2 last year. It is down by almost 30% from its highest level this year. So, is it a good buy?
Binance coin has solid fundamentals
The BNB coin has some of the best fundamentals in the crypto industry. First, it was established by Binance, the biggest crypto exchange in the world with over 100 million customers. Third-party data shows that Binance maintains a substantial market share handling over 34% of all crypto volume.
Second, millions of BNB coins are being incinerated each quarter. According to BNB Burb, 1.63 million tokens worth over $1 billion were burned in the fourth quarter of last year. The website estimates that 1.566 million tokens worth $1.08 billion will be burned this quarter.
Binance coins worth $200k are burned each week. 415.3 BNB coins were incinerated in the last seven days, bringing the total real-time burns to about $140 million. The goal is to reduce the number of BNB tokens in circulation from over 144 million to 100 million, making it highly deflationary.
Third, the BSC Chain is gaining market share in key industries in the crypto industry. A good example of this is in the decentralized exchange (DEX) sector, where it has become the third-biggest chain after Solana and Ethereum. Its protocols handled volume of $84 billion in the last 30 days, while the other two processed $264 billion and $92 billion, respectively.
BNB also has a DeFi total value locked (TVL) of over $5 billion and bridged volume of almost $18 billion. Its stablecoin volume has risen to $6.95 billion.
Further, token burns and rising network fees have led to an increase in its staking yield. It now yields about 4.76%, higher than Sui’s 2.54% and Cardano’s 2.66%.
BNB price forecast
The weekly chart shows that the Binance Coin price is still highly bullish. It has formed a cup and handle pattern, one of the top bullish continuation signs. The ongoing consolidation is part of the formation of the handle section.
BNB coin has remained above the 50-week Exponential Moving Average (EMA) and the major S&R level of the Murrey Math Lines. It is also in the process of forming a hammer candlestick pattern, comprising of a long lower shadow and a small body.
Therefore, the BNB price will likely have a bullish breakout, with the next level to watch being the November 2024 high of $790, up by about 40% from the current level. A move above that level will point to more gains, potentially to $1,000.
