BNB’s price action is currently one of the most resilient in the cryptocurrency space. Despite the volatility in the market in August, BNB only fell 7.56%. September’s performance was even better, with a 6.47% gain despite the September 6 crash. Investors looking to short BNB may want to re-do their due diligence as the asset looks poised to rise.
So far in October, Binance Coin has lost 1.01% and remains in the tight range it has been in for the past six months. Looking at the BNB chart, the asset is waiting for the volatility to end before it surges to new all-time highs.
3 Reasons You Should Not Short BNB Price
BNB price has fallen 1.9% in the past 24 hours and is trading at $561.20. The decline is in line with the recent decline in cryptocurrency prices following higher-than-expected U.S. CPI data, which rose 0.2% in September. Economists expected CPI to rise by only 0.1%.
The news sent the price of Bitcoin below $60,000, causing the entire cryptocurrency market to fall. The total cryptocurrency market capitalization fell 1.4% in the past 24 hours and hovered around $2.228 trillion.
Despite these market fluctuations, BNB’s price remains the most stable among most crypto assets. Here are some other reasons to consider before shorting BNB’s price:
1. Strong market position
The Binance cryptocurrency exchange remains one of the largest and most influential cryptocurrency platforms in the world, and BNB is at the core of its ecosystem. This strong market influence can provide strong support for BNB prices.
Binance is the third-largest crypto asset by market cap (excluding stablecoins), which means it has a lot of influence in the market. Since December 2023, BNB’s dominance has increased by 530% to 3.93%.
This happens when an asset becomes more popular and widely adopted, leading to increased demand, which in turn leads to higher prices. With the bull run approaching and the increase in demand for the Binance exchange and network, BNB’s dominance is expected to increase, affecting its price.
2. Practicality and use cases
BNB is more than just a speculative asset; it has real utility within the Binance ecosystem, providing trading fee discounts, participation in token sales, and a variety of other benefits. This constant demand helps stabilize and even increase its price.
Additionally, ongoing BNB token burns continue to shrink the supply of the token, while demand continues to soar. The impact is that prices will soar.
BNB adopts a real-time destruction mechanism, which means that a fixed proportion of the collected gas fees is destroyed in each block. The specific proportion is determined by the BSC validator.
In addition, there are scheduled quarterly automatic burns. 1.7 million BNB ($932 million) were destroyed in the third quarter, while 1.6 million BNB are expected to be destroyed in the fourth quarter.
3. Historical price performance
BNB has shown remarkable resilience and growth even during market downturns. Throughout BNB price history, it has never fallen below the ascending trendline shown on the chart. Furthermore, each time it touches this line, it has hit new highs.
Betting on a cryptocurrency with such a strong track record can be risky, especially if there is optimism about its future performance.
