Binance recently completed its 21st quarterly BNB burn, according to an announcement. Binance has a quarterly auto-burn that significantly reduces the supply of BNB. This puts BNB among deflationary cryptocurrencies.
The amount of BNB removed from the market and the rate at which the market shrinks will determine if it is a good option for long-term trades. At the time of writing, the altcoin’s circulating supply was little over 161.3 million, which qualifies it as a low-cap asset.
The official announcement states that Binance burnt 2.06 million BNB, or around 0.013% of the supply that is currently in circulation.
Over the course of the next ten years, Binance could burn through more than two million BNB, or more than one-third of its present supply.
This would greatly benefit BNB bulls, giving investors a compelling reason or value proposition to hold BNB for an extended period of time.
BNB has performed admirably during the past few years. Its £232 price tag was nevertheless considered excessive as of the time of writing despite a significant decline from its £617 peak.
However, if the quarterly burn continues, BNB could seem like it was still selling below its potential long-term value.
BNB’s price action has been bearish in October so far. It is currently performing in line with the bearish market conditions and is down around 13% from its most recent highs.
If the market maintains its current course, the coin’s price action may decline. A bullish bounce might be imminent given the market’s unpredictability.
Both the 30-day MVRV ratio and the 90-day mean coin age have decreased during the past four weeks in terms of short-term demand.
The decreasing pattern suggests that throughout the past four weeks, investors have been reducing their holdings. This means that there hasn’t been much buying pressure, which has given the bears the upper hand.
However, there have been some encouraging findings. For instance, between September 19 and September 20, the supply held by the top addresses grew significantly.
As the September lows were retested, active addresses saw a significant increase over the past 24 hours.
BNB may potentially decline more, but the current signs point to a potential bullish respite from the short-term support. The burn highlights BNB’s potential long-term worth in terms of its price action over time.