Publication date: March 20, 2024

After a period of downward movement, BNB seems to have found new bullish momentum over the past week. With a rise of over 15% in nine days, investors are wondering: is this the beginning of a new rally?

Introduction on Binance Coin (BNB)

BNB, Binance's cryptocurrency has become one of the most dominant digital assets in the world. With a market capitalization of about $92 billion, the coin is among the five largest cryptocurrencies. Since its launch in 2017, BNB has evolved from a utility token for trading discounts to a versatile digital currency used within Binance Smart Chain, strike, and payments. Despite the volatility of the crypto market, BNB has maintained its position as one of the most valuable crypto assets.

Historical performance and previous analyses

We have previously covered BNB, focusing on the fundamental strength of the Binance ecosystem and the impact of regulation. At the time, it was noted that BNB has a robust support structure thanks to the broad adoption of Binance products and the periodic token burns that shrink the offering. You can read our previous article back here.

In previous market analyses, we saw how BNB held up despite setbacks such as legal pressure on Binance and broader market volatility. This underscored users' and investors' confidence in the currency, due in part to its strong network fundamentals.

With the recent price movement, BNB seems to be back in the spotlight. But what is driving this rise?

Recent Developments Supporting BNB

In recent weeks, there has been considerable volatility in BNB's share price. Below we have listed the following events regarding Binance coin.

1. Increased trading volume and liquidity: Over the past week, BNB's trading volume has increased by over 40%, indicating renewed interest from traders and institutional parties. Rising volume during a price increase is often a bullish signal.

2. Expansion of Binance Smart Chain (BSC): The growth of decentralized applications (dApps) and new projects on BSC has contributed to increased demand for BNB. BSC remains one of the most widely used blockchains for DeFi and NFTs, despite competition from networks such as Solana and Ethereum.

3. BNB Burn Mechanism: Binance continues to remove BNB tokens from circulation every quarter through its automatic burn mechanism, which reduces supply and supports price. The last burn removed over 2.1 million BNB from circulation, creating additional scarcity.

4. Broader market sentiment: The overall crypto market is showing signs of recovery, with Bitcoin and Ethereum also showing recent increases. Historically, BNB often moves with the broader market trend.

Increased liquidity, the BNB burn mechanism, and the broader market recovery are all contributing to a positive outlook for BNB. This makes the currency increasingly attractive to investors. It is therefore advisable to monitor the coming weeks and months closely, as BNB may further position itself for growth.

Price development of BNB

Last week, Binance Coin (BNB) experienced a notable rise, thanks in part to positive developments within the Binance ecosystem. The increase in liquidity on the BNB Chain has propelled the price upward. Looking deeper into BNB's recent price movement, the cryptocurrency has experienced some volatility in recent weeks. Since Tuesday, March 11, BNB tested support in the range of $510 - $530, after which the coin has managed to stabilize well. Other cryptocurrencies on the BNB Chain such as PancakeSwap (CAKE) and Trustswap (TST), also showed some momentum this week.

BNB's current price action shows that the currency is moving toward significant resistance around $645. If this resistance is broken, the next key levels are around $680 - $700. A breakthrough of these levels could pave the way for a test of the all-time high of $794, reached in early December 2024.

The chart below shows BNB's price movement over the past four months. The downward trend since December is visible, although there was a recovery moment in February that eventually led to another decline. Furthermore, the upward movement in recent days is also striking. The question now is whether this upward trend will continue, or whether the same pattern as in February will reoccur. This depends mainly on breaking through resistance or holding support levels.

What could further push up the price of BNB?

1. Further adoption of Binance Smart Chain: New projects and collaborations may drive demand for BNB, especially in DeFi and gaming.

2. Stronger institutional interest: Larger financial players are showing increasing interest in Binance as a reliable infrastructure within the crypto industry.

3. Market-wide recovery: If Bitcoin and Ethereum continue their upward trend, this will likely benefit BNB as well.

4. Increased regulatory clarity: Binance has recently taken steps to become more compliant with regulations, which could create more trust in the ecosystem.