The Binance coin (BNB) maintained a steady uptrend this week, remaining above the important resistance level at $700. It has been one of the best-performing cryptocurrencies as it moved from less than $2 a few years ago to $730 today. Here are the four main reasons why the BNB price will rise to $1,000 soon.
BNB price has strong technicals
The first main reason why the BNB token is on a path to $1,000 is that it has very strong technicals. The chart below shows that the coin has remained above the 50-week and 25-week Exponential Moving Averages (EMA) for a long time. Any drop below these averages have been brief.
The BNB token has formed a cup and handle chart pattern, a popular continuation sign. This pattern has been forming since 2021, when it peaked at $700. It formed a rounded bottom, which completed in 2024.
The coin is now in the process of forming the handle section. Unlike other patterns, the C&H can take a long time to form and complete. It eventually breaks out and rallies over time. In this case, the depth of the cup is about 75%, meaning that the coin has room for a similar gain from the current level. If this happens, it will jump to over $1,100 in the next few months,
No chart pattern is 100% accurate. As such, a drop below the support at $650 will invalidate the bullish view and point to more downside.
Binance Coin token burns
The other big catalyst for the BNB price is that the network is burning thousands of tokens, a move that reduces those in circulation. It does this in two ways: quarterly and real-time. The real-time burn rate comes from the transaction fees the network handles daily. It has done 450 BNB coins worth over $326,000 in the last seven days.
BNB also has a quarterly burn, which is calculated based on the price and the number of blocks produced during the period. Data shows that the network will burn tokens worth over $1.01 billion soon. The estimate is that it will also burn tokens worth over $1 billion in the first quarter.
These burns aim to eventually reduce the number of tokens in circulation from about 140 million today to 100 million.
Token burns are the exact opposite of unlocks since they reduce those in circulation and makes the remaining ones more valuable.
Read more: Binance Coin (BNB) price prediction: Inverse H&S points to a rebound
BNB has a high staking yield
Meanwhile, the BNB token has a high staking yield of about 4%, which is slightly higher than that of Cardano and Hedera Hashgraph. Like other projects, BNB generates its staking returns from the fees it collects. This fee will likely continue growing as the role of BNB in the crypto industry grows.
A combination of higher fees and fewer tokens through burning will increase the amount of money distributed to stakers. Therefore, the coin could attract more staking inflows in the next few months, especially if bond yields fall.
Other reasons for the Binance Coin price surge
There are other reasons why the BNB price could continue rising, possibly hitting $1,000 later this year. First, it has a large ecosystem of over 800 dApps with a total value locked of over $5.8 billion and bridged TVL of over $20 billion. Its stablecoin market cap stands at $6.9 billion.
Second, the coin will benefit from the policies of the incoming Donald Trump administration, which has pledged to be more friendly to the crypto industry. For example, there are odds that the administration will be open to Further, BNB is owned by Binance, the biggest crypto exchange in the world. Binance has proven to be a highly dependable exchange over time, having survived the biggest downturns in the crypto sector such as during the FTX crash.
The post 4 reasons the Binance BNB price will surge to $1000 soon appeared first on Invezz
