Why You Should Think Twice Before Shorting BNB Price
The BNB price action is currently one of the most resilient in the crypto space. Despite the wild volatility that hit the markets in August, BNB only lost 7.56%. It performed even better in September, gaining 6.47% despite the September 6 crash. Investors looking to short BNB may want to re-do their due diligence as the asset looks primed for an upside move.
So far, in October, the Binance coin has been down 1.01% and is still maintaining the tight range it has been in for the last six months. Examining the BNB chart, the asset is waiting for the volatility to end before it can surge to new all-time highs.
3 Reasons Why You Should Not Short BNB Price
Binance coin price is down 1.9% over the last 24 hours and is trading at $561.20. This decline is in line with the recent fall in crypto prices following higher-than-expected U.S. CPI data, which rose by 0.2% in September. Economists have anticipated the CPI to only increase by 0.1%.
BNB Price Chart
The Bitcoin price slipped below $60,000 on this news, causing the entire crypto market to dip. The total crypto market cap is down 1.4% in the last 24 hours and hovers around $2.228 trillion.
Despite these market fluctuations, the price of BNB still remains the most stable among the majority of crypto assets. Here are some other reasons to consider before shorting BNB price:
1. Strong Market Position
Binance crypto exchange remains one of the world’s largest and most influential cryptocurrency platforms, and BNB is at the core of its ecosystem. This strong market presence can provide robust support for BNB price.
Binance is the third largest crypto asset by market cap (excluding stablecoins), meaning it has a great influence in the market. BNB dominance has grown by 530% since December 2023, sitting at 3.93%.
This happens when an asset becomes more popular and widely adopted, leading to higher demand and, consequently, an increase in price. As the bull run nears and demand for Binance exchange and network increases, BNB dominance is anticipated to grow, impacting its price.
2. Utility and Use Case
BNB isn’t just a speculative asset; it has real utility within the Binance ecosystem, offering transaction fee discounts, participation in token sales, and various other benefits. This consistent demand can help stabilize and even boost its price.
Moreover, the consistent BNB token burns continue to shrink the supply of the token while demand continues to skyrocket. The impact is price will skyrocket.
BNB uses a real-time burning mechanism in which a fixed ratio of the gas fee collected is burned in each block, with the ratio decided by BSC validators.
Additionally, there are scheduled quarterly auto burns. In Q3, 1.7 million BNB ($932 million) was burned, while the estimated Q4 burn will be 1.6 million BNB.
3. Historical Price Performance
BNB has shown remarkable resilience and growth, even during market downturns. In all of BNB price history, it has not broken below the rising trendline shown on the chart. Additionally, every time it touched the line, it made new highs.
BNB price
Betting against a cryptocurrency with such a strong track record can be risky, especially with positive sentiment around its future developments.
Conclusion
BNB price has a strong influence in the crypto space because of the size of the exchange. With a strong historical performance, Binance coin is poised to break all-time highs this bull run. However, there is some period of consolidation remaining, with a 14% potential drawdown.
The post Why You Should Think Twice Before Shorting BNB Price appeared first on CoinGape.
