BNB price ignores the crypto crash: could it surge 70%?

Binance Coin, the fifth-largest cryptocurrency by market cap, has largely avoided the ongoing crypto crash and is hovering near its all-time high.

Binance Coin (BNB) was trading at $695 on Friday; this was only 12% below the record reached in December. In comparison, Bitcoin (BTC) fell by 15%, while other mega cryptocurrencies such as Solana (SOL) and others fell by over 20%.

BNB’s durability is primarily due to its low correlation with Bitcoin and other cryptocurrencies. According to Blockchaincenter data, BNB’s 90-day correlation coefficient with Bitcoin is 0.65, lower than that of many other major cryptocurrencies.

BNB’s price action is also affected by significant quarterly token burns, which reduces the supply of coins in circulation. Binance uses two types of burn mechanisms: real-time and quarterly burns.

Real-time burns occur by burning a fixed proportion of the gas fee collected in each block. This burning mechanism burned $171 million worth of BNB tokens.

Quarterly burn is based on the number of blocks produced each quarter. 1.63 million BNB tokens worth $1.02 billion were burned in the fourth quarter. According to data from BNB Burn, the upcoming quarterly automatic burn is expected to burn another 1.55 million tokens worth approximately $1.09 billion.

The BSC ecosystem has also continued to perform well over the past few months. For example, the total value locked (TVL) of the ecosystem increased by 3% in the last 30 days, while Ethereum, Solana and Tron decreased by over 8% during this period.

Decentralized Exchange protocols in the BSC ecosystem have processed more than $9.75 billion worth of tokens in the last seven days.

BNB price chart point BNB price chart | Source: crypto.news

Technical indicators show that BNB has further upside potential in the long term. The token remains above both short-term and long-term moving averages. Additionally, the Relative Strength Index and the MACD, two popular momentum oscillators, continue to rise, signaling bullish momentum.

Binance Coin also formed the cup and handle chart pattern, which is a bullish continuation signal commonly seen in technical analysis. This model consists of two parts: cup and handle. In BNB’s case, the cup and handle division, which occurred between May 2021 and July 2022, is currently ongoing.

If the pattern completes, BNB could see a price increase of over 70% and potentially rise above $1,180 in the long term.