Binance Coin (BNB) traded higher, touching $36.79 before profit-booking put breaks on the uptrend which was likely kick-started by the suggestion of a potential major coin burn.
Binance Coin saw a local high of $36.79 after Binance CEO tweeted that his team had discussed a program aimed at accelerating the network’s coin burn program.
BNB’s price has increased by about 7% in the past 24 hours, jumping to highs of $36. Although the upside price action has cooled off slightly as shown on the 4-hour chart, the short term outlook for BNB suggests another leg up is likely.
This outlook will strengthen if bulls break above the immediate resistance zone and the cryptocurrency market also experiences a rally.
BNB/USD daily chart. Source: TradingView
On the daily chart, Binance Coin price broke above the 38.2% Fib level (32.77) and 23.6% Fib level ($34.32). The next target on the upward scale is $36.80, with a move to $40.00 likely to spur increased buying.
On the downside, two previous resistance levels provide the immediate cushion bulls need to weather downward pressure. The levels are at the 38.2% Fib level ($32.77) and the 50% Fib level ($31.52).
While the daily RSI remains above the midpoint and suggests short term bullish bias, the trend will turn negative if the price drops below $30.00. In this case, bulls will rely on support at the 50-SMA and 100-SMA.
BNB/USD 4-hour chart. Source: TradingView
The 4-hour chart suggests increased downward pressure since the breakout witnessed over the weekend. BNB/USD is trading within an ascending parallel channel that could extend gains to $38.00 in the short term.
However, prices have been capped beneath the upper trendline and the RSI has turned lower to suggest negative divergence. If the price drops below the lower limit of the parallel channel, the next support levels are at the 50-SMA ($30.96) and 100-SMA ($29.71).
At the time of writing, Binance Coin is trading around $35.00 against the US dollar on most exchanges.
Binance Coin burn
BNB price broke above the $30 level and touched the $36.00 ceiling over the weekend as Bitcoin’s move to a new high above $24,000 sparked a general surge within the altcoin market. But an additional factor that might have pushed BNB/USD over the resistance line was the comment by Binance CEO Changpeng Zhao regarding the coin’s economic model.
In the tweet posted over the weekend, the Binance chief revealed plans for an accelerated burn program. The information saw the BNB/USD pair jump from $31.05 to $35.20 before bulls extended the gains to $36.79.
On 17 October 2020, the cryptocurrency exchange announced its 13th quarterly coin burn. The undertaking saw Binance forever remove over 2 million BNB ($68 million in USD) from circulation, with BNB price soaring from around $27.00 to $32.00. Coin burn (similar to buy-back of shares by listed companies) removes tokens permanently from circulation and generally results in a price rise for the cryptocurrency.