Binance’s Precious BNB: Fundamental and Technical Analysis

BNB Analysis

Binance Coin (BNB) is the native token of Binance, the world’s largest cryptocurrency exchange by trading volume and users. BNB powers the Binance ecosystem, which includes Binance Chain, Binance Smart Chain, Binance DEX, Binance Launchpad, Binance Academy, and more. BNB can be used to pay for trading fees, participate in token sales, stake for rewards, and access various services and platforms within the Binance network.

BNB has been one of the best performing cryptocurrencies since its launch, reaching an all-time high of $690.93 on May 10, 2021, according to CoinMarketCap. However, since then, BNB has faced several challenges, both from the market conditions and the regulatory pressures. As of August 22, BNB is trading at $207.57, down 0.89% in the last 24 hours and 69.96% from its peak.

What are the factors behind BNB’s recent performance and what are the prospects for its future growth? Let’s take a look at some of the fundamental and technical aspects of BNB.

BNB Fundamentals

BNB has a strong fundamental value proposition as the fuel of the Binance ecosystem. Binance is constantly innovating and expanding its products and services, creating more use cases and demand for BNB. Some of the recent developments include:

  • Binance Labs, the venture arm of Binance, invested $5 million in Curve DAO Token (CRV), a decentralized exchange for stablecoins and low-volatility assets. The investment aims to support Curve’s growth and expansion to Binance Smart Chain (BSC), a parallel blockchain to Binance Chain that enables smart contracts and decentralized applications.
  • Binance announced two hard forks for BSC in August 2023, dubbed London and Athens. The London hard fork will implement five Ethereum Improvement Proposals (EIPs), including EIP-1559, which introduces a base fee mechanism that burns a portion of the transaction fees. The Athens hard fork will introduce several upgrades to improve the performance and security of BSC.
  • Binance launched a new feature called zkBNB, which allows users to deposit and withdraw BNB with zero-knowledge proofs. This feature enhances the privacy and security of BNB transactions, as users do not need to reveal their addresses or balances.

These are just some examples of how Binance is constantly improving its ecosystem and creating value for its users and token holders. Moreover, BNB has a deflationary supply model, as Binance conducts quarterly token burns based on its profits. The ultimate goal is to reduce the total supply of BNB from 200 million to 100 million. The last token burn took place on July 18, when Binance destroyed 1,296,728 BNB worth about $393.6 million. This reduces the circulating supply and increases the scarcity of BNB.

BNB coin

BNB Technicals

BNB has been in a downtrend since its all-time high in April, forming lower highs and lower lows on the daily chart. The price has been trading below the 50-day and 200-day moving averages (MAs), indicating a bearish bias. The relative strength index (RSI) is hovering around the 40 level, suggesting a lack of momentum.

The immediate support level for BNB is at $200, which is a psychological round number and also the 38.2% Fibonacci retracement level of the downtrend from April to June. A break below this level could open the door for further losses towards $180, which is the 50% Fibonacci retracement level and also a previous resistance turned support zone.

The immediate resistance level for BNB is at $260, which coincides with the 50-day MA and also the 23.6% Fibonacci retracement level of the downtrend from April to August. A break above this level could signal a reversal of the downtrend and pave the way for a rally towards $280, which is the 38.2% Fibonacci retracement level and also a previous support turned resistance zone.

The long-term outlook for BNB depends largely on how the market sentiment and the regulatory environment evolve. BNB could benefit from the growth and innovation of the Binance ecosystem, as well as from the deflationary supply model. However, BNB could also face challenges from the increasing competition and scrutiny from the authorities. BNB investors should be aware of the risks and rewards of holding this token and do their own research before making any decisions.

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