In the wake of FTX’s collapse, many eyes focused on the now undisputed largest cryptocurrency exchange in the world, Binance. Due to an opaque proof of reserves, the withdrawal of accounting firm Mazars, and a bank run on the exchange, the Binance Coin (BNB) suffered a temporary loss of trust and excessive price losses.
Slowly and gradually, however, investors seem to be regaining confidence in Binance. The BNB price has risen 9.3% over the last seven days, reaching $301 at press time.
Although there was some positive news from Binance yesterday and today, the BNB price is facing a bearish pattern on the weekly chart. The pattern usually predicts a trend reversal and shows three peaks, with the two outer ones close to each other and the middle peak being the highest.
The left shoulder forms when investors drive the price up, and then temporarily lose their enthusiasm. The head builds up when enthusiasm reaches its peak. The right shoulder forms when the price rises again, but does not reach its previous peak before falling again.
The head of the BNB weekly chart was formed in the week when FTX filed for bankruptcy. In the following weeks, the price fell before BNB experienced a recent rally thanks to the generally bullish market sentiment. With this, BNB is in a crucial scenario.
If BNB breaks the neckline at $210 to the downside, the chart pattern could validate and BNB could see a downtrend within the next few weeks, pushing the price toward $153.
Binance Coin Counts On Strong Fundamentals
There are also good fundamental reasons to be bullish on the BNB price. The crypto exchange announced its 22nd quarterly burn today. As part of it, the exchange has burned 7,181.03 BNB via the Pioneer Burn Program, which was equivalent to about $617 million.
In total, Binance has now burned approximately 2.06 million BNB. With the latest quarterly burn, the exchange has burned about 1.28% of all BNB in circulation, which is the highest in almost two years. This shows that Binance’s trading business is again doing better than in previous months.
#Binance completes 22nd quarterly #BNB burn!
🔥 2.06m #BNB has been burned 🔥 pic.twitter.com/21v9R7H78K
— Binance (@binance) January 17, 2023
In other bullish news, the exchange yesterday launched a new off-exchange custody service that allows institutions to access trading and investment products within the exchange ecosystem without having to deposit collateral directly on the exchange:
We’re excited to announce the official launch of our off-exchange settlement solution, Binance Mirror. Through Mirror, institutions can deploy their liquidity on Binance while their assets remain secured in our segregated cold storage.
As the exchange explained, assets in Binance Mirror account for more than 60% of all assets secured in the custody product. With the new service, the exchange could hope for increased adoption by institutions that previously did not want to take the risk of third-party custody, but at the same time want to access the most liquid exchange in the market.
According to the exchange, the adoption of Binance Mirror increased significantly in the last quarter of 2022 with a 67% increase in assets mirrored from Binance Custody to the exchange.
Featured image from Satheeshsankaran / Pixabay, Chart from TradingView.com