Key Takeaways:
- Binance latest BEP-95 upgrade plans to introduce a real-time burning mechanism.
- Binance’s native token, BNB, looks set to reach $1,000 after breaking out of a bullish pattern.
NEW DELHI (CoinChapter.com) — World’s largest crypto exchange by volume, Binance, is working to introduce Binance Evolution Protocol, BEP-95.
Through BEP-95, Binance Smart Chain developers plan to introduce a real-time burning mechanism for a portion of gas fees. The upgrade would help reduce the supply of Binance’s native token, Binance Coin (BNB). In addition, the quarterly burn is still in the picture.
On Oct 18, Binance completed its 17th Burn Event, in which a total of 1,335,888 BNB (equivalent to $639.46 million). Out of the total BNB burned, 17,839 BNB were part of Binance’s Pioneer Burn program.
According to Binance’s announcement, the BEP-95 burn relies on the activity on the BSC network. Moreover, the upgrade would continue functioning even after the scheduled BNB burns reach the target supply of 100 million BNB in circulation.
The proposal also notes that while BEP-95 might reduce the income from staking, the resulting increase in BNB prices would likely increase the rewards of validators and delegators. The burning ratio would be adjustable through governance, and BNB holders would decide how to despatch the gas rewards, as per Binance’s announcement.
BSC developers explained that Binance would introduce governable parameters to two smart contracts – System Reward Contract and ValidatorSet Contract. These contracts are responsible for collecting smart contracts. For now, the initial burnRatio would be 10% of the gas fees.
In detail, Binance introduced burnRatio as the new governable parameter for the two smart contracts.
Also Read: BNB pumps 11% as Binance pledges $1 billion to boost BSC growth.
Additionally, BSC validators can change burnRatio through a proposal vote based on their staked BNB amounts. A proposal would need a minimum deposit of 2,000 BNB to be eligible for a review by the validators. Moreover, only votes of bounded validators would be considered in the final tally.
BNB’s Next Breakout Would Likely Target $1,000
Meanwhile, BNB weekly chart prices have formed a bullish pennant. In detail, a bull pennant is a bullish continuation pattern where breakout follows a period of consolidation. Volume plays a vital role in the pennant pattern. Consolidation should occur at a lower volume, while higher volumes should accompany breakout.
The pole of the pennant helps calculate the profit target for the breakout.
As such, BNB could see prices rise above the $1,000 price level once it breaks out from the bullish pattern it is trading in. Meanwhile, the relative strength index for BNB on the weekly chart is 58.51, forecasting a neutral momentum for the Binance token.
Furthermore, BNB fell 6% intraday on Oct 21, effectively devouring the current week’s gains. Immediate resistance for Binance Coin is at $490. Meanwhile, bulls would find it difficult to conquer the next resistance level at $508. BNB is yet to close above this price level after falling below it during May 19’s market crash.
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On the other hand, BNB has support from its 26-day Exponential MA line at $447.75. If prices breach below immediate support, bulls would likely try to consolidate above support at $432. However, if a sustained selloff forces prices further below, BNB would have support at $414, near its 200-day SMA.
Furthermore, bullish momentum seems to be declining for BNB. Momentum oscillator MACD’s histogram bars are decreasing in height, which indicates the MACD line (difference between 12-day and 26-day EMA) is moving closer to its signal line (9-day EMA of MACD).
When the MACD line moves below its signal line, it marks a bearish crossover, which the MACD histogram plots as negative bars. As such, BNB’s MACD trendlines might be heading for a bearish crossover unless prices react to Binance’s proposed BEP-95 gas fees burning news.
At the time of writing, BNB was trading at $478.9, up 1.65% on the day
